Shares of office supply retailer Office Depot Inc. (NYSE: ODP) have been surging in the premarket despite the fact that company reported a big fall in its first-quarter profit. However, Office Depot was able to report earnings per share that topped analysts' forecasts, giving a lift to its shares.

The retailer reported that quarterly profit plunged 55% to $68.8 million, or 25 cents a share, as the housing meltdown brought deep declines for the company's sales in Florida and California. These numbers are down from $153.8 million, or 55 cents a share, a year ago. Excluding one-time items, Office Depot's earnings would have come at 29 cents a share. Analysts' forecasts (which typically exclude one time items) were for 22 cents per share.

Looking at revenue, Office Depot saw a drop of 3.2% to $3.96 billion, as the retailer faced North American sales declines. Analysts predicted a higher revenue of $4.07 billion for the quarter, according to Thomson Reuters.

Continued consumer fears over the weak housing market and credit crisis put a curb on their spending due to declining home values. Sales at its North American division fell 7.3%, while international sales rose 5.7%, the company stated. Increased competition also had an impact on its quarterly results.

Because of the weak housing market, Office Depot saw its shares plunging for the past year. For the moment though, the company's better-than-expected earnings impressed investors who showed their enthusiasm by pushing the stock over 7% up in morning trading.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.