Hasbro Profit Rises, but Revenue Drops

Monday, February 7th 2005, 9:56 am
By: News On 6

PAWTUCKET, R.I. (AP) _ Hasbro Inc., the nation's second largest toy maker behind Mattel Inc., reported higher fourth quarter earnings Monday despite weak sales in its U.S. toys unit. The results still fell short of analyst expectations, and the stock slipped in morning trading.

The Pawtucket-based toy maker said its net earnings rose to $82.1 million, or 44 cents per share, from $76.6 million, or 41 cents per share, a year ago. Revenue fell to $1.06 billion from $1.12 billion.

Analysts surveyed by Thomson First Call had expected profit of 49 cents per share on revenue of $1.08 billion before the effects of a pre-tax accounting charge.

In morning trading, Hasbro shares dropped 40 cents, or 2 percent, to $20 on the New York Stock Exchange. The stock has traded in a 52-week range of $16.90 to 23.33.

Revenue in the company's domestic toy segment, which includes products like My Little Pony and Mr. Potato Head, slipped to $263.7 million from $318.9 million. The decline reflected an overall softness in boys business, including weak sales of action figures such as GI Joe, Hasbro said.

``We did not anticipate the softness in our boys' business,'' said Alfred Verrecchia, the company's president and chief executive.

The company also cited lower than expected margins on its VideoNow personal video players.

Hasbro said it took actions in the fourth quarter, including staffing changes, to cut costs to offset a tougher retail environment and weaknesses in the U.S. toys segment.

Revenue in the games segment also fell to $270.3 million from $293.5 million, reflecting weakness in the traditional board game business. The company said that weakness was partially offset by stronger sales of video games.

International revenue rose to $504.9 million from $477.2 million a year ago, with a $31.8 million foreign exchange boost. Absent that impact, international revenue fell 0.9 percent in the latest quarter.

For the full year, net income was $196.2 million, or 96 cents per share, up from $157.7 million, or 85 cents per share the previous year. Hasbro restated earnings for 2003 because of an accounting change, resulting in a charge of 9 cents per share for the year.

Revenue fell to $3 billion from $3.14 billion in 2003.