Shares of The ODP Corporation (NASDAQ:ODP), owner of brands like Office Depot and CompuCom, soared on Thursday after the company reported results for the third quarter of 2020. Total revenue was down year over year but up from last quarter, which investors viewed positively. Furthermore, its profit came in better than expected, leading to the stock's 18% rise for the session.
For Q3, ODP Corporation's revenue fell 9% year over year to $2.5 billion. Sales in its retail division were only down 3%, reflecting a rebound in consumer spending. But in its business solutions division, sales fell 11%. While revenue was down, investors appear to like how it's trending. The company's Q3 revenue jumped 18% from the second quarter, demonstrating things are improving.
The stabilization of the top line resulted in bottom-line profits. ODP Corporation reported net income of $57 million according to generally accepted accounting principles (GAAP). Furthermore, the company delivered free cash flow of $295 million, an increase of 64% year over year.
ODP Corporation's management likes where it's at. As a result of a stabilizing retail business and solid profitability, it resumed its share buyback program, on which there's still $130 million in authorization before the end of 2021. That said, the team refrained from giving formal forward guidance for the quarter ahead. Rather, it deferred guidance until a planned Investor Day event in the first quarter of next year.