Thursday, February 3, 2011

Hasbro Inc. (NASDAQ: HAS): Q4 Earnings Preview 2010

Hasbro Inc. (NASDAQ: HAS), the world’s second-biggest toymaker, is scheduled to release fourth-quarter earnings before the market open on Monday, February 7, 2011. Analysts, on average, expect the company to report earnings of 95 cents per share on revenue of $1.31 billion. In the year ago quarter, the company reported earnings of $1.09 per share on revenue of $1.38 billion.

Hasbro, Inc. engages in the design, manufacture, and marketing of games and toys. Its offerings include a variety of games, including traditional board, card, hand-held electronic, trading card, role-playing and digital versatile disc (DVD) games, as well as electronic learning aids and puzzles.

In the preceding third quarter, the Pawtucket, Rhode Island-based company's net income was $155.16 million or $1.09 per share compared to $150.36 million or $0.99 per share a year ago. Revenue grew 3% in the quarter to $1.31 billion from $1.28 billion in the prior-year quarter. Excluding the negative foreign exchange impact of $16.2 million, net revenues grew 4%. Analysts, on average, expected the company to report earnings of $1.04 per share on revenue of $1.29 billion. 

Recently, the company announced that it expects fourth quarter and full year sales will be down compared to the prior year. While the company still predicts that earnings will be up in 2010, adjusted earnings will grow only modestly. "For 2010, we anticipate reporting our tenth consecutive year of earnings per share growth. We no longer believe we will grow revenues for the year due to a slowdown in U.S. consumer demand, which we experienced late in the fourth quarter," President and CEO Brian Goldner said in a statement. The toymaker said that it will report revenues of about $1.3 billion for the holiday shopping quarter, down 7.1% from $1.4 billion reported in the prior-year quarter. The company also said it will report a 1.7% decline in revenues for the full-year 2010 to about $4.0 billion from last year's revenues of $4.07 billion. However, adjusted earnings for the year is expected increase modestly from last year's $2.48 per share. The anticipated adjusted earnings excludes a favorable tax adjustment of $21.2 million or $0.14 per share recorded during the first quarter of fiscal 2010. "In 2010, we had a number of strong product initiatives, good growth internationally, including in the emerging markets, and we continued to unlock the global potential of our brands while tightly managing our expenses. Collectively, these factors are contributing to our expected growth in earnings per share for 2010 despite reduced revenues," Goldner added.

Hasbro's weak forecast contrasts with overall holiday results, which were the best since 2006 as Americans shook off some caution left over from the recession and bought both gifts and items for themselves. Overall holiday spending rose 4 percent in November and December, according to research firm ShopperTrak.

The company remains optimistic regarding 2011 based on its strong product line-up slated for 2011 and 2012, as well as its strategic associations with Discovery, Universal Pictures and Electronic Arts. Hasbro continues to expect both revenue and earnings per share to grow due to its brand innovation and strong entertainment initiatives.

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