American Greetings 1Q profit falls 25 percent

CLEVELAND - Greeting card maker American Greetings Corp. on Wednesday said its fiscal first-quarter profit fell 25 percent as it recorded a big loss related to the sale of its retail stores. But the results beat Wall Street expectations, and its shares climbed 35 percent.

For the three months ended May 29, the company reported a profit of $10 million, or 25 cents per share, compared with $13.3 million, or 27 cents per share, a year ago.

The per-share results reflected a 19 percent decline in the number of outstanding shares from last year.

Revenue slipped 3.6 percent to $412.9 million, from $428.3 million a last year.

Analysts polled by Thomson Reuters, on average, expected the company to post profit of 20 cents per share, on revenue of $396.6 million.

Shares climbed $2.21, or 34.8 percent, to $8.57 on heavy volume in morning trading. The stock has traded in a range of $3.24 to $18.45 in the past 52 weeks, and started the session down about 16 percent for the year.

During the quarter, American Greetings sold its retail store operations to Schurman Fine Papers, which operates stores under the Papyrus name. American Greetings said it recorded a $28.3 million non-cash loss on the sale, which reduced earnings by 44 cents per share.

As part of that deal, American Greetings bought Schurman's wholesale division, which supplies Papyrus greeting cards to merchants. It also bought a 15 percent stake in Schurman.

Adding Papyrus and Recycled Paper Greetings, another card brand, helped boost sales of greeting cards during the quarter, said CEO Zev Weiss in a statement.

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