US: American Greetings reveals Q3 loss

'Rapidly deteriorating economy' impacts social expression company.
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For the third quarter of fiscal 2009, American Greetings has reported total revenue of $454.1 million, a pre-tax loss from continuing operations of $228.7 million and a loss from continuing operations of $193.3 million.

These numbers compare with total revenue of $485.8 million, pre-tax income from continuing operations of $44.1 million and income from continuing operations of $29.1 million for the third quarter of fiscal 2008.

Back in December, American Greetings announced that as a result of the recent deterioration in the global economic environment, indicators arose during the third quarter requiring the firm to accelerate the process of reviewing its goodwill and other long-lived assets for impairment.

As a result of this, the company recorded, within the international social expression products and AG Interactive segments, estimated non-cash pre-tax goodwill and other asset impairment charges of $242.9 million that reduced earnings per share by $4.46 during the quarter.

American Greetings also reviewed its long-lived assets within the Retail Operations segment, recording an impairment charge of $3.9 million that reduced earnings per share of six cents during the quarter.

275 positions have also been lost as part of a cost reduction effort.

Chief executive officer Zev Weiss said: "The rapidly deteriorating economy has significantly impacted our business in the third fiscal quarter. We are currently focused on taking additional steps to reduce our cost structure in order to position our business during this difficult economic period."

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