Greeting card producer American Greetings (Symbol: AM) reported earnings exceeding consensus estimates Wednesday morning. AM reported earnings of $0.75 / share on profits of $29.7 million, up sharply from a loss of $193.3 million in the same quarter last year, most of which was due to write-downs and restructuring charges. The street was expecting earnings of $0.66 / share.
Though the company lags behind only Hallmark in terms of total greeting card sales, the earnings beat was not enough to ring in a happy holiday for AM. After gapping up on the open on relatively high volume, AM actually traded down slightly for the day. The stock had rallied nearly 10% on Monday and Tuesday heading into the pre-open earnings report, thus baking in some heavy expectations, and apparently the results, though good, were not good enough.
Shares traded down again on Thursday’s half-day, finishing below Monday’s close at $23.04. The 50-day moving average sits at just under $22, and I would suggest avoiding the stock until it can test those levels and close above them. Even then, upside may be limited, and you might be better waiting for next quarter’s release to see if AM’s turnaround is actually for real.
Disclosure: No positions in AM.