Saturday, April 2, 2011

Hasbro Inc. (NASDAQ: HAS): Q1 Earnings Preview 2011

Hasbro Inc. (NASDAQ: HAS)

Hasbro Inc. (NASDAQ: HAS) is scheduled to release its first-quarter financial results before the market open on Thursday, April 14, 2011. Analysts, on average, expect the company to report earnings of $0.17 per share on revenue of $663.99 million. In the year ago quarter, the company reported earnings of $0.26 per share on revenue of $672.37 million.

Hasbro, Inc. engages in the design, manufacture, and marketing of games and toys. Its offerings include a range of games, including 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 fourth quarter, the Pawtucket, Rhode Island-based company's net income was $140.01 million or $0.99 per share, compared with a profit of $165.56 million or $1.09 per share last year. Revenue dropped to $1.28 billion from $1.38 billion a year ago. Analysts, on average, expect the company to report earnings of $0.95 per share on revenue of $1.31 billion.

According to Hasbro Chief Financial Officer Deborah Thomas, the company should be able to grow revenues and earnings per share in 2011, with return from many of its recent investments. At its last earnings call in January, Hasbro President and Chief Executive Officer Brian Goldner stated that in 2011 the company will have significant initiatives across all the elements of its multi-year branded-play strategy. Hasbro management expects 2011 to be Hasbro’s first year in the digital arena.

The consumer goods sector, more specifically the toy industry, has been taking measures to adapt to the changing times. After the recession instilled moderation in the hearts of customers, the sector has experienced trouble returning to its peak sales numbers. Higher oil and material costs have also weighed on results and forced some companies to begin taking actions in response to their dwindling margins. 

Companies like Hasbro Inc. have relied on the interactive toy market and retail partnerships to stay afloat. Hasbro is currently working to take advantage of its strong brands like Transformers by partnering with game developer Jagex to produce an online game that is expected to perform well in Asia. The game is set to be launched in 2012 in North America, Latin America, Europe, New Zealand and Australia.The maker of Nerf foam toys, Monopoly board games and G.I. Joe action figures will sell toys and games based on Sesame Street characters Elmo and Cookie Monster this year. Toys based on motion picture Transformers: Dark of the Moon should also help boost sales this fiscal year, along with further expansion in emerging markets and the innovation with its The Hub television network. The toymaker is also launching toys, digital games and other licensed products related to the movie "Transformers -- Dark of the Moon" in July."In 2012, we have quite a good lineup. Obviously we are very excited about ... the restaging and reinvention of Star Wars in 2012 in 3-D, coming sometime early in the year," Goldner told analysts in a conference call. Hasbro will also launch toys based on the "Avengers", "Battleship" and "Spiderman" movie franchises.

The company's stock currently trades at a forward P/E (fye Dec 26, 2012) of 13.31 and PEG Ratio (5 yr expected) of 1.51. In terms of stock performance, Hasbro shares have gained nearly 22% over the past year.

Full Disclosure: None.
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