Hasbro earnings increase in 2005, fourth quarter

A strong performance from Star Wars toys drove revenue increases of 15.9 percent in U.S. Toys segment. Star Wars exceeded the company’s expectations, generating $494.1 million in global revenue.

Pawtucket-based toy maker Hasbro Inc. reported Monday net earnings of $212.1 million for 2005, compared to $196.0 million in 2004. Excluding the $25.8 million impact of a tax on the repatriation of foreign earnings, 2005 full year earnings were $237.9 million.
For the fourth quarter, the company reported net earnings of $94.3 million, compared to $81.9 million in 2004. Excluding the tax on the repatriation, fourth quarter earnings were $120.1 million.

For the year, worldwide net revenues were $3.1 billion, compared to $3.0 billion a year ago. The 2005 results included $494.1 million in Star Wars revenue. For the fourth quarter, the company reported worldwide net revenues of $1.1 billion, an increase of $12.7 million, which includes a $21.0 million negative impact of exchange rates, compared to the prior year.

“Hasbro performed well in 2005. In a challenging environment we delivered solid revenue growth, strong earnings growth and operating cash flow was up significantly,” said Alfred J. Verrecchia, president and chief executive officer.

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“While I am pleased with our overall performance, in particular our Star Wars product line, the Games segment performance was below our expectations and clearly there is opportunity for improvement this year,” Verrecchia added.

Revenues in the U.S. Toys segment were $1.1 billion for the year and $305.6 million for the quarter, compared to $952.9 million and $263.7 million in 2004, respectively. The results reflect the success of Hasbro’s line of licensed Star Wars products, the company said.

Full-year operating profit was $80.0 million, compared to $7.2 million last year, primarily due to higher volume and improved product mix, as well as lower advertising and product development costs, Hasbro said.

Revenues in the Games segment were $730.6 million for the year and $235.8 million for the quarter, compared to $796.0 million and $270.3 million in 2004, respectively. The segment revenue decline can be attributed to lower trading card and board game volume. Full-year operating profit decreased to $69.5 million, compared with $137.6 million last year.

International segment revenues were $1.2 billion for the year and $510.6 million for the quarter, an increase of 3.1 percent or $37.1 million for the year and 1.5 percent or $7.4 million for the fourth quarter.

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