American Greetings Goes Red

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American Greetings (NYS: AM) reported earnings on April 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 29 (Q4), American Greetings beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share contracted to a loss.


Gross margins dropped, operating margins improved, net margins dropped.

Revenue details
American Greetings booked revenue of $456.2 million. The one analyst polled by S&P Capital IQ predicted sales of $442.4 million on the same basis. GAAP reported sales were 7.8% higher than the prior-year quarter's $423.3 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.84. The two earnings estimates compiled by S&P Capital IQ predicted $0.45 per share. GAAP EPS were -$0.27 for Q4 against $0.37 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 57.3%, 30 basis points worse than the prior-year quarter. Operating margin was 12.5%, 310 basis points better than the prior-year quarter. Net margin was -2.2%, 590 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $415.7 million. On the bottom line, the average EPS estimate is $0.70.

Next year's average estimate for revenue is $1.73 billion. The average EPS estimate is $2.14.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 111 members out of 187 rating the stock outperform, and 76 members rating it underperform. Among 66 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 39 give American Greetings a green thumbs-up, and 27 give it a red thumbs-down.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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