CLEVELAND – American Greetings Corp. (AM), the nation's second-largest maker of greeting cards, said Thursday that first-quarter earnings surged fivefold from last year's first quarter, which had included a hefty debt retirement charge.
Net income rose to $26.4 million, or 35 cents per share, from $4.2 million, or 6 cents per share, a year ago. Last year's quarter included $39 million of pretax expenses associated with the retirement of $186.2 million of debt and a $3.1 million gain on the sale of a marketable security.
Sales edged up to $443.3 million from $433.5 million last year.
Analysts surveyed by Thomson Financial were looking for the company to post earnings of 30 cents per share in the latest quarter.
American Greetings raised its full-year earnings outlook to a range of $1.52 to $1.57 per share, from prior guidance of $1.46 to $1.51 per share, citing a change in the adoption date of new stock option accounting rules as well as the effects of first-quarter share repurchases.
Analysts are looking for profit of $1.56 per share, on average, for fiscal 2006.
For the second quarter of fiscal 2006, the company is projecting a loss of 1 cent to 6 cents per share, compared with income from continuing operations of 9 cents per share in the prior-year period. The 2005 period included a $10 million pretax gain from the modification of certain licensing agreements.
Analysts are expecting the company to post operating profit of 2 cents per share for the second quarter.
Shares of American Greetings fell 31 cents, or 1.2 percent, to $26.69 on the New York Stock Exchange (search).
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