Office-supply retailer Office Depot Inc. (ODP) on Wednesday reported a third-quarter loss versus a year-earlier profit citing charges and a drop in sales at its international division, sending its shares down 5 percent.

The company said the loss was due to asset impairment charges, exit costs and options expensing. Office Depot added that gross margins were hurt by a drop in sales at its international division.

"Office Depot fell short of our third-quarter forecast, excluding all charges, options expensing, and the benefits of a significatly lower tax rate... International (division) fell significantly short," Goldman Sachs analyst Matthew Fassler wrote in a research report released on Wednesday.

The company reported a loss of $48 million, or 15 cents a share, compared with a profit of $89 million, or 28 cents a share, a year earlier.

Excluding the charges and options expensing, the No.2 office-supply retailer posted earnings of $115 million, or 36 cents a share.

On that basis, analysts on average forecast quarterly earnings of 35 cents a share, according to Reuters Estimate.

Sales for the quarter rose 5 percent, to $3.5 billion, Office Depot said.

While comparable sales at its North American retail division rose 4 percent in the third quarter, international sales decreased 4 percent.

"Other negative gross margin impact was primarily attributable to a decline in the International Division, which more than offset improvements experienced in North American Retail," Office Depot's release said.

The stock fell to its lowest level in three months and was down $1.36 to $25.65 on the New York Stock Exchange.

The retailer's shares are down 9.4 percent since early August and currently trade at 18.7 times 2005 earnings. The stock of its bigger rival Staples Inc. (SPLS) has fallen around 9.5 percent in about three months and is trading at 18.5 times earnings.