Gain Lifts American Greetings

Revenue slips partly due to a return accrual.
Author:
Publish date:

American Greetings

(AM) - Get Report

posted a 35% jump in third-quarter earnings despite slipping revenue, helped by a gain from an asset sale.

The greeting cards company earned $62.8 million, or 78 cents a share, in the three months ended Nov. 30, compared with earnings of $46.4 million, or 60 cents a share, last year. Sales fell 3% from a year ago to $586.2 million.

American Greetings recorded a gain of $22.4 million, or 27 cents a share, from discontinued operations related to the sale of its Magnivision subsidiary. Income from continuing operations totaled $40.3 million, or 51 cents a share, and included charges of $13 million to cover returns, $8.2 million for a plant closure and $16.6 million for layoffs.

Analysts surveyed by Thomson First Call forecast earnings of 69 cents a share in the latest quarter.

"Net sales were down versus the prior period's third quarter as lower revenues in both the retail segment and seasonal gift wrap business were combined with the $13.0 million non-cash accrual to reflect an adjusted merchandising strategy for seasonal product," the company said in a release.

"These reductions to sales were partially offset by incremental revenue from acquisitions in the AG Interactive segment and favorable foreign exchange movements."