American Greetings returns to profit in 3rd qtr

AP News
Posted: Dec 23, 2009 8:15 AM

American Greetings Corp. said Wednesday that it returned to a profit in the third quarter, as a hefty impairment charge weighed down the prior-year period.

The greeting card company earned $29.7 million, or 75 cents per share, during the quarter. That compares with a loss of $193.3 million, or $4.25 per share, a year earlier.

The prior year's results included a $242.9 million impairment charge.

Revenue for the three months ended Nov. 27 slipped 3 percent to $440.2 million from $454.1 million.

American Greetings, like many businesses during the recession, has worked to trim expenses and other costs in an attempt to somewhat offset slowing sales. Consumers have pulled back on their spending during the economic downturn, with some shoppers opting to send cards electronically to save money instead of mailing traditional cards.

The company lowered its material, labor and other production costs to $205 million from $223.2 million and reduced its selling, distribution and marketing expenses to $124.2 million from $159.8 million.

On Tuesday American Greetings said it reached a deal with party goods maker Amscan Inc. and would stop making its own party goods. The move will result in a plant closing and about 225 facility-related job cuts.