Thursday, July 14, 2011

Hasbro Inc. (NASDAQ: HAS): Q2 Earnings Preview 2011

Hasbro Inc. (NASDAQ: HAS) is scheduled to release its second-quarter financial results before the market open on Monday, July 18, 2011. Analysts, on average, expect the company to report earnings of 39 cents per share on revenue of $857.49 million. In the year ago quarter, the company reported earnings of 29 cents per share on revenue of $737.79 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 first quarter, the Pawtucket, Rhode Island-based company's net income was  $17.20 million, or 12 cents per share, compared to $58.94 million, or 40 cents per share, in the year-earlier quarter. Revenue dropped to $671.99 million from last year's $672.37 million a year ago. Analysts, on average, expected the company to report earnings of $0.17 per share on revenue of $663.99 million.

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. The company pointed out that 2011 is the first year in its multi-year strategic plan for significant initiatives across all elements of its brand blueprint. 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. Hasbro will also launch toys based on the "Avengers", "Battleship" and "Spiderman" movie franchises.

Hasbro expects international sales to race past those in the United States in coming years, boosted by emerging markets growth. The company sees 60 percent of its revenue coming from outside the United States in the medium to long term.The international segment of the second-largest U.S. toy company has historically accounted for about 40 percent of overall revenue.

While the sales climate in the United States remains uncertain, the company said it was seeing dramatic growth in markets such as Brazil, Russia, India and China. Most of these economies are powered by the purchasing power of a burgeoning middle class. The toy maker is optimistic about its prospects in Germany, Chile, Columbia and Mexico as well.

Hasbro, which launched a new television channel called "The Hub" in partnership with Discovery last year, will take its shows to networks in more than 20 countries by this fall to boost awareness of its brands.

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