Earning Briefs

Delray Beach, Fla.— Despite ongoing softness in sales, results at Office Depot for the first quarter reflect strong operating performance across all business units. Sales in the North American Retail division were flat for the three months, coming in at $1.62 billion, compared with $1.61 billion in the year-ago period. Operating profit for this division reached $123.6 million, up from $76.2 million in the same quarter in 2001. Gross margins for the retail segment improved by 312 basis points year over year, although store operating costs were 23 basis points higher than last year. Overall Office Depot sales edged up 1 percent, reaching $3.04 billion, compared with $3.02 billion in the same three months in 2001. Operating income for the company was $164 million, an increase of 69 percent over the $97 million recorded a year earlier. Net earnings hit $102.7 million in the first quarter, compared with $56.3 million year over year.

Oakdale, Minn. — With demand for data storage media more robust than anticipated across all market sectors and in all geographies, Imation reported revenue of $252.2 million in the segment, an increase of 14.8 percent over the $219.6 million reported in the first quarter of 2001. The fastest growing part of the business was consumer products, including recordable and re-recordable compact discs and DVDs. Operating income in the company's core data storage segment was $22.2 million, a 131 percent increase over the $9.6 million recorded in the year-ago period. Imation expects data storage revenue to be up 7 percent to 10 percent for the full year 2002, hitting a range of $935 million to $965 million, compared with $875.9 million reported in 2001. This tops the company's previous forecast of full-year data storage revenue growth of 5 percent to 7 percent. Overall company first-quarter sales reached $283.7 million, down from $299.9 million year over year. Last year's first quarter results included $43.6 million in revenue from businesses that have since been divested. Total company operating income was $24.3 million, compared with $6.1 million in the same three months in 2001, or $11.8 million, excluding special items. Net income jumped from $4.9 million in the first quarter of 2001 to $16.8 million this year.

Lexington, Ky. — Double-digit growth in laser and inkjet printers, particularly consumer all-in-one products, helped drive first-quarter sales at Lexmark International up 6 percent, to $1.1 billion, compared with $988 million in the year-ago period. Net earnings, however, dropped to $71.5 million in the first three months, ended March 31, compared with $79.7 million the previous year. Laser and inkjet supplies revenue was $546 million in the first quarter, a 16 percent jump over the $471 million a year ago. This segment now represents 52 percent of Lexmark's total revenue, up from 48 percent a year earlier. Laser and inkjet printer revenue was $401 million in the first three months, up 5 percent from $383 million in the same period in 2001. Gross profit margin dipped 310 basis point, to 29.5 percent in the first quarter, due to lower laser and inkjet printer margins. The company expects year-over-year revenue growth in the second quarter will exceed the first three months, and could grow at a double-digit rate.