Greeting cards are, by nature, specifically designed to capture someone's attention. Maybe the same can be said of American Greetings' (NYSE:AM) third-quarter earnings release date, which falls only a few days before Christmas. With only a handful of other companies on the earnings docket, the nation's second largest card maker takes center stage just as pre-holiday trading winds to a close. Unfortunately, it may have found the glare of the spotlight a little harsh, as a sharp, unexpected reduction in full-year guidance has knocked the shares back by about 8% in morning trading.

During the quarter, American Greetings recorded a series of charges, including $13 million for a writedown of merchandise, $8.2 million related to a plant closure, and $16.6 million stemming from "a 300 person overhead reduction program" -- how's that for great PR jargon? As a result, the company's full-year outlook has been trimmed back to a new range of $1.02-$1.07 from previous forecasts of $1.46-$1.51. Excluding the expenses, management said the company is still on track to hit the earlier estimate.

This morning's reaction seems a little excessive, considering the sudden drop in guidance was simply an adjustment to reflect earlier expenses. Maybe the revision would have been less of a surprise if the press release announcing the job cutbacks earlier this month had forewarned of the impending $16.6 million one-time charge. No dollar figure was mentioned. Even without the reduced outlook, though, this is not a quarterly report card that American Greetings shareholders will want to hang on their refrigerators for very long.

Net income jumped to $62.8 million ($0.78) from $46.4 million the year before. However, credit for the increase primarily belongs to the sale of the Magnivision reading glasses subsidiary, which contributed a $35.5 million pre-tax gain. Income from continuing operations actually fell 11% to $40.3 million from $45.1 million in last year's third quarter. With declines in both retail and seasonal gift wrap business, sales slumped 3% lower to $586.2 million.

There are roughly 3,000 greeting card vendors but really only two dominant players. American Greetings controls roughly one-third of the market, and larger rival Hallmark owns about one-half. You can pick up an American Greetings birthday card or Valentine's Day card not only at your local Wal-Mart (NYSE:WMT) -- which represented 12% of last year's sales -- but also at any of 600 domestic retail outlets. Both companies have expanded their repertoire of retail merchandise, such as candles, stationery, and gifts, to help supplement the core greeting card business

Overall sales, though, have been sliding south the past several years, and paper greeting cards have remained flat for the better part of a decade. The introduction of online cards -- available from sites such as Yahoo (NASDAQ:YHOO) or Amazon.com (NASDAQ:AMZN) -- has not helped matters. E-cards are creative, fast, and, most important, free. Still, I see them as somewhat impersonal; paper cards are much more tangible.

According to a poll commissioned by the Greeting Card Association, nine of 10 adults plan to mail at least one paper card this holiday season. The study also found that one-third plan to hang on to their cards as "keepsakes" -- a sentimental practice that few would ever consider for an email card.

Despite this quarter's weakness, recent cost-cutting initiatives will pave the way for future bottom-line growth, which is a great message to send any time of year.

Fool contributor Nathan Slaughter usually waits until about Dec. 23 to send out his Christmas cards. He owns none of the companies mentioned.