UPDATE 2-American Greetings swings to profit; shares up
(Adds CEO comment, stock price)
NEW YORK, April 17 (Reuters) - American Greetings Corp (AM.N) posted a quarterly net profit on Thursday versus a year-ago loss, despite a dip in revenue, due to the absence of costs that weighed down year-ago results.
The company's shares rose more than 6 percent in morning trading.
The second-largest U.S. greeting card company behind Hallmark Cards Inc, reported a profit of $15.6 million, or 31 cents a share, for the fourth quarter that ended Feb. 29, compared with a year-ago loss of $12.2 million, or 22 cents a share.
Analysts expected 26 cents a share, according to Reuters Estimates.
Chief Executive Zev Weiss said the results were in line with the company's expectations.
In the year-ago period, American Greetings sold its candle product lines and recorded a pretax loss of 18 cents per share within its continuing operations. It incurred costs of 7 cents a share related to the closure of 60 of its retail stores.
The company, which holds licenses for Care Bears, Strawberry Shortcake and Holly Hobby, said total revenue edged down to $493.2 million from $495.9 million a year earlier, hurt by the sale of the candle product lines.
The company said it would invest in creative content and product freshness to drive card sales over the next year, but noted it was cautious about the current economic environment.
"Depending on how our retailers are impacted by weakness in the economy, including consumer foot traffic at retail and consumers' discretionary purchasing, we could see events like retail consolidation and door closures," Weiss said during a conference call.
For fiscal 2009, which began on March 1, the company forecast earnings of $1.60 to $1.85 per share, with revenue expected to be flat or up slightly. Analysts currently expect profit of $1.68 a share, according to Reuters Estimates.
American Greetings shares were up $1.11, or 6.2 percent, at $18.96 in morning New York Stock Exchange trading. The stock has fallen about 23 percent in the past year. (Reporting by Martinne Geller in New York and Karen Jacobs in Atlanta, editing by Maureen Bavdek)
