Apparently being in the business of selling greetings cards for $5.00 per card is not quite as profitable as you might imagine. That is the case for American Greetings Corporation (NYSE: AM) just in time for Christmas.
The company reported earnings of $0.50 EPS on sales of $463.6 million. Thomson Reuters had estimates of $0.81 EPS and $439.4 million in sales. A previous target for 2012 was to get revenues up 3% but now the company noted that it feels confident that it can meet or beat those expectations.
American greetings noted higher costs and also has raised its cap-ex planes to $55 million to $70 million versus a prior 2012 projection of $45 million to $50 million. This is lowering cash flow projections to $90 million to $110 million from a prior target of $125 million to $145 million.
Let’s just say that the market is much less than receptive today. Shares are down 19.4% at $13.69 and that breaks the chart for a new 52-week low. The prior 52-week range was $15.20 to $24.84.
JON C. OGG
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