Thursday slashed its dividend as it warned of a third-quarter earnings shortfall and moved toward a major restructuring.
Shares of the world's largest publicly traded greeting card company plunged $8.13, or 41%, to $11.63 in midday
New York Stock Exchange
American Greetings said third-quarter earnings are expected to be as low as 50 cents a share, down from 81 cents a share last year. The company forecast full-year earnings in the range of $1.30 to $1.35 a share, down from $1.81 a share last year. Four analysts polled by
First Call/Thomson Financial
expected the company to earn 91 cents a share in the third quarter and $1.98 a share for fiscal 2001. Third-quarter earnings are scheduled to be announced Dec. 19.
The company also will cut its quarterly dividend to 10 cents from 21 cents, beginning with the dividend payable in March 2001.
The company blamed the shortfall on a static greeting card market, increased pressure to reduce retail pricing, growing consolidation among retailers and competition from the Internet. American Greetings said it would detail a major restructuring at year-end, including a charge that would cover the possible closing of plants and the windup of products, and would provide earnings guidance for fiscal 2002 then.
In addition, American Greetings forecast wider-than-expected losses from its
site and said the unit wouldn't likely be involved in any strategic partnership this year. The company said the loss at the Internet unit would amount to 35 to 40 cents a share for fiscal 2001, compared with the previous estimate of 20-to-25-cent loss.