CHICAGO – Licensing income helped boost American Greetings Corp. (AM) to a profit in its second quarter, even though sales at the greeting cards maker were flat.
In the quarter ended Aug. 31, American Greetings earned $6.9 million, or 10 cents per share. Sales were $391.9 million.
The company said earnings from continuing operations were $5.9 million, or 9 cents per share. Wall Street analysts surveyed by Thomson First Call had predicted a 1 cent loss.
A year earlier, American Greetings had a loss of $9.7 million, or 15 cents per share, on sales of $390.9 million. The company had a loss from continuing operations of $10.6 million, or 16 cents per share, in that period.
Chief executive Zev Weiss said Wednesday the company has noted improvement in both earnings and cash flow. Along with improved licensing income, he said supply chain (search) costs were reduced and interest expenses were lower due to prepayment of debt.
Weiss projected earnings per share will be between 67 cents and 72 cents in the third quarter and $1.46 to $1.51 for the fiscal year.
The company has initiated a quarterly dividend 6 cents per share.
American Greetings shares were up 96 cents, or 4 percent, at $25.15 in Wednesday morning trading on the New York Stock Exchange (search). The shares were trading at about $20 in May.
Along with greeting cards, the company's product lines include gift wrap, party goods, candles, stationery, calendars, educational products, ornaments and electronic greetings.
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