CLEVELAND – American Greetings Corp. (AM), the nation's second-largest greeting card maker, said Thursday that third-quarter profits rose 35 percent as a boost from the sale of its reading glass division offset low sales of cards and gift wrap.
The Cleveland-based company said it earned $62.8 million, or 78 cents a share, in the quarter. That's up from $46.4 million, or 60 cents a share, in the third quarter a year ago.
Excluding discontinued operations, the company earned $40.3 million, or 51 cents per share, in the latest quarter, down from $45.1 million, or 58 cents per share, last year.
Income was helped by the July sale of the company's Magnivision (search) reading glasses subsidiary, which was based in Miramar, Fla., to an affiliate of sunglasses maker Foster Grant (search). American Greetings said it saw a $35.5 million pretax gain from the sale of Magnivision, which was the world's largest seller of over-the-counter nonprescription reading glasses.
In the most recent third-quarter, American Greetings sales of cards and gift wrap were down nearly 3 percent. Net sales of $586.2 million fell from $603.8 million in the period a year ago.
Earlier this month, American Greetings said it was eliminating 300 jobs to cut costs. The company said Thursday that the most recent financial results include a charge of $16.6 million related to those layoffs, as well as $21.2 million in other charges, including a plant closing and changes to its greeting card business.
Analysts surveyed by Thomson First Call expected earnings of 69 cents per share.
American Greetings has about 20,000 employees, including about 1,700 at its headquarters.
Along with greeting cards, American Greetings' product lines include gift wrap, party goods, candles, stationery, calendars, educational products, ornaments and electronic greetings.
Earnings of $1.02 to $1.07 are expected for the year, down from $1.46 to $1.51 previously forecast by the company, which blamed the plant closings and layoffs.
Analysts predicted full-year earnings of $1.76 per share.
American Greetings shares fell $1.15, or 4.1 percent, to $26.76 on the New York Stock Exchange (search).