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Factors to Note Ahead of ODP Corporation's (ODP) Q3 Earnings
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The ODP Corporation (ODP - Free Report) is likely to register a decline in the top line when it reports third-quarter 2020 numbers on Nov 5, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $2,469 million, indicating a decline of 11.3% from the prior-year reported figure.
The Zacks Consensus Estimate for earnings for the quarter under review has been stable at $1.31 over the past 30 days. The current Zacks Consensus Estimate indicates that the company is likely to swing back to profit following a loss in the last-reported quarter. However, the consensus estimate still suggests a sharp decline from earnings of $1.50 reported in the year-ago quarter.
This provider of business services and supplies, products, and technology solutions has a trailing four-quarter negative earnings surprise of 4.5%, on average. In the last reported quarter, the company’s bottom line missed the Zacks Consensus Estimate by a significant margin.
Key Factors to Note
The impact of coronavirus on ODP Corporation's third-quarter performance cannot be ignored. The company has been struggling with soft sales across its segments due to the ongoing crisis. On its last earnings call, management notified that business disruption caused by the pandemic may continue to impact sales across its Business Solutions Division in the second half of 2020 compared with the prior year period. In the last reported quarter, the company highlighted that several of its business customers either paused operations or temporarily transitioned into a remote work environment owing to the pandemic.
Again, matters have been dismal at ODP Corporations’ Retail and CompuCom Divisions. We note that project-related customer-imposed delays, lower services volumes and reduced demand for technology products due to business disruptions caused by the coronavirus crisis hurt the company’s CompuCom Division in the second quarter. We believe that persistence of such headwinds might have affected the division’s performance in the third quarter as well.
Nonetheless, the company’s third-quarter performance might have benefited from Business Acceleration Program that involves reducing costs, improving operational efficiencies, enhancing service delivery, effective use of technology and automation, and identifying strategic investment opportunities. Moreover, as part of the “Maximize B2B” restructuring plan, the company has been focusing on accelerating growth on its B2B platform, lowering dependency on retail consumer operations and maximizing cost savings.
We also note that the company has been witnessing sturdy demand for essential products such as cleaning and breakroom supplies, technology products, and other work/learn-from-home enabling products. Additionally, the company has been making every effort to enhance e-commerce platforms. The company has implemented curbside pick-up option in all locations.
Office Depot, Inc. Price, Consensus and EPS Surprise
Our proven model does not conclusively predict a beat for ODP Corporation this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
ODP Corporation has a Zacks Rank #3 but an Earnings ESP of 0.00%.
3 Stocks With a Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Costco (COST - Free Report) has an Earnings ESP of +1.60% and a Zacks Rank #3.
Walmart (WMT - Free Report) has an Earnings ESP of +11.51% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Factors to Note Ahead of ODP Corporation's (ODP) Q3 Earnings
The ODP Corporation (ODP - Free Report) is likely to register a decline in the top line when it reports third-quarter 2020 numbers on Nov 5, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $2,469 million, indicating a decline of 11.3% from the prior-year reported figure.
The Zacks Consensus Estimate for earnings for the quarter under review has been stable at $1.31 over the past 30 days. The current Zacks Consensus Estimate indicates that the company is likely to swing back to profit following a loss in the last-reported quarter. However, the consensus estimate still suggests a sharp decline from earnings of $1.50 reported in the year-ago quarter.
This provider of business services and supplies, products, and technology solutions has a trailing four-quarter negative earnings surprise of 4.5%, on average. In the last reported quarter, the company’s bottom line missed the Zacks Consensus Estimate by a significant margin.
Key Factors to Note
The impact of coronavirus on ODP Corporation's third-quarter performance cannot be ignored. The company has been struggling with soft sales across its segments due to the ongoing crisis. On its last earnings call, management notified that business disruption caused by the pandemic may continue to impact sales across its Business Solutions Division in the second half of 2020 compared with the prior year period. In the last reported quarter, the company highlighted that several of its business customers either paused operations or temporarily transitioned into a remote work environment owing to the pandemic.
Again, matters have been dismal at ODP Corporations’ Retail and CompuCom Divisions. We note that project-related customer-imposed delays, lower services volumes and reduced demand for technology products due to business disruptions caused by the coronavirus crisis hurt the company’s CompuCom Division in the second quarter. We believe that persistence of such headwinds might have affected the division’s performance in the third quarter as well.
Nonetheless, the company’s third-quarter performance might have benefited from Business Acceleration Program that involves reducing costs, improving operational efficiencies, enhancing service delivery, effective use of technology and automation, and identifying strategic investment opportunities. Moreover, as part of the “Maximize B2B” restructuring plan, the company has been focusing on accelerating growth on its B2B platform, lowering dependency on retail consumer operations and maximizing cost savings.
We also note that the company has been witnessing sturdy demand for essential products such as cleaning and breakroom supplies, technology products, and other work/learn-from-home enabling products. Additionally, the company has been making every effort to enhance e-commerce platforms. The company has implemented curbside pick-up option in all locations.
Office Depot, Inc. Price, Consensus and EPS Surprise
Office Depot, Inc. price-consensus-eps-surprise-chart | Office Depot, Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict a beat for ODP Corporation this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
ODP Corporation has a Zacks Rank #3 but an Earnings ESP of 0.00%.
3 Stocks With a Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Target (TGT - Free Report) has an Earnings ESP of +11.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco (COST - Free Report) has an Earnings ESP of +1.60% and a Zacks Rank #3.
Walmart (WMT - Free Report) has an Earnings ESP of +11.51% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>