American Greetings Posts Surprise Profit
{{#rendered}} {{/rendered}}American Greetings Corp. (AM) Thursday posted a quarterly profit instead of an expected loss, sending its shares up 7 percent, with results boosted by a shift in sales to higher margin products.
The greeting card maker said profit for the fiscal second quarter ended Aug. 31 was $3.2 million, or 5 cents a share, compared with $6.9 million, or 10 cents a share, a year earlier.
Analysts, on average, had expected the Cleveland-based company to post a loss of 3 cents per share, according to Reuters Estimates.
{{#rendered}} {{/rendered}}But weakness in the company's international business offset strength in the U.S. greeting card and online businesses, with some European retailers choosing to wait until the third quarter before having holiday products shipped, the company said.
The U.S. business was helped by retailers moving more Father's Day (search) and graduation shipments to the second quarter from the first.
The second quarter is usually the company's slowest, so any changes in the timing of shipments can have an exaggerated impact on quarterly results, Chief Financial Officer Michael Merriman said in a conference call with analysts.
{{#rendered}} {{/rendered}}Sales slipped to $387.6 million from $392.1 million a year earlier and missed analysts' mean target of $394.7 million.
American Greetings forecast third-quarter earnings of 70 cents to 75 cents per share. Analysts, on average, expect 73 cents.
American Greetings shares rose $1.81 to $26.78 on Thursday on the New York Stock Exchange.