(Adds share activity, comments from conference call,
By Martinne Geller
NEW YORK, Sept 26 American Greetings Corp
(AM.N) posted a smaller-than-expected quarterly profit as
costs increased and warned that full-year earnings could
come in at the low end of its prior forecast, sending its
shares down as much as 13 percent.
The second-largest U.S. greeting card maker behind
privately held Hallmark also said on Friday that the recent
turmoil on Wall Street could delay its plan to sell its
Strawberry Shortcake and Care Bear properties for $195
The deal with Canada's Cookie Jar Entertainment was
scheduled to close on Sept. 30. That is now unlikely,
according to Chief Executive Zev Weiss, who said he still
expected to complete the transaction by the end of the
American Greetings said net income tumbled to $2.3
million, or 5 cents per share, in the second quarter ended
on Aug. 29 from $8.4 million, or 15 cents per share, a year
The average forecast from two analysts was 9 cents per
share, according to Reuters Estimates.
Revenue rose 2 percent to $385.8 million, helped by
higher North American card sales. But profit margins were
depressed as the company sold more cards with music, lights
or other embellishments, which cost more to make.
American Greetings said it still expected fiscal 2009
earnings of $1.60 to $1.85 per share from continuing
operations, with cash flow from operations at $60 million
to $80 million, minus capital expenditures.
However, Weiss said the company could finish the year
near the lower end of its earnings forecast because of the
weak economy and the risk inherent in its seasonal
American Greetings shares, which through Thursday had
gained 18 percent over the past two months, were down 95
cents, or 5.7 percent, at $15.69 in morning New York Stock
Exchange trade after falling to $14.50 earlier in the
(Reporting by Martinne Geller, editing by Gerald E.
McCormick and Lisa Von Ahn)