Q1 profit fall for American Greetings

But shares climb as results beat Wall Street expectations.
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American Greetings has revealed its results for the first fiscal quarter ending May 29th.

The company reported a profit of $10 million, or 25 cents per share, compared with $13.3 million a year ago.

Revenue, meanwhile, slipped 3.6 per cent to $412.9 million, from $428.3 million last year.

However, analysts polled by Thomson Reuters, on average expected American Greetings to post profit of 20 cents per share on revenue of $396.6 million.

During the quarter, the company sold its retail store operations to Schurman Fine Papers, which operates stores under the Papyrus name. American Greetings recognised a preliminary non-cash loss on the disposition of $28.3 million (after tax, $17.4 million).

At the time of the sale, American Greetings also purchased the wholesale division of Schurman which supplies Papyrus brand greetings cards primarily to leading specialty, mass, grocery and drug store channels in the US. It also purchased a 15 per cent equity interest in Schurman.

"We currently anticipate cash flow from operating activities less capital expenditures to be greater than $70 million this fiscal year," said American Greetings' CEO Zev Weiss.

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