Hurt by weaker sales amid an uncertain economic recovery, American Greetings (NYSE:AM) reported Wednesday a worse-than-expected 8.4% decrease in third-quarter profit.
The Cleveland company posted net income of $32.2 million, or 78 cents a share, compared with $29.7 million, or 75 cents a share, in the same quarter last year, missing the Street’s view of 71 cents.
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Revenue for the maker of greeting cards and other social expression products was $430.1 million, down from $440.2 million a year ago, ahead of average analyst estimates polled by Thomson Reuters of $434.04 million.
The company attributed sales declines to certain party goods transactions that occurred in December 2009.
“I am pleased with our overall performance in the third fiscal quarter,” said American Greetings CEO Zev Weiss. “We have managed to continuously develop new and innovative products while tightly managing expenses, which has resulted in solid earnings for the quarter.”
Looking ahead the company said it anticipates traditional risks of the Christmas and Valentine's Day seasons, with additional uncertainty arising from the slow pace of the economic recovery.
The company believes, however, that its refined business portfolio, along with changes made to its capital structure over the last few years, position American Greetings for the future challenges.
“We expect to at least meet our projected cash flow from operations minus capital expenditures goal of $125 million with upside to this estimate based on further improvements to the balance sheet and lower than anticipated capital expenditure,” Weiss said.