PAWTUCKET – Hasbro Inc. today posted a first-quarter profit of $32.9 million or 19 cents per diluted share, compared with a loss of $4.9 million or 3 cents per diluted share in the first quarter of 2006, on its largest sales gain in nearly eight years.
The performance – “primarily a reflection of higher revenues,” the company said – far exceeded the 1 cent per share average of four projections compiled by Bloomberg News.
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Revenue increased 34 percent to $624.3 million from the year-ago $468.2 million. The biggest increase since the second quarter of 1999, Bloomberg said, it far exceeded analysts’ expectations of a 9.4-percent increase.
“All major product categories were up significantly,” the company said, “with growth driven by shipments of the Marvel [Entertainment Inc.] product line as well as core brands, including Littlest Pet Shop, Nerf, Play-Doh, My Little Pony, Playskool, Transformers and board games.”
“Marvel is turning out to be a good deal,” Colin Symons, who helps manage $290 million, including 325,000 Hasbro shares at Symons Capital Management Inc. in Pittsburgh, told Bloomberg. Hasbro is in the first year of a five-year, $205 million licensing agreement with Marvel for action figures and games based on comic-book characters including Spider-Man, the X-Men, the Fantastic Four and Captain America.
“Our core brands and new product initiatives performed very well, with revenue growth for the quarter pretty balanced between our Marvel business and all our other Hasbro business,” said Alfred J. Verrecchia, Hasbro’s president and CEO.
“While it’s early in 2007, we are very pleased with the earnings we reported today and the continued progress we are making on all of our financial goals,” said David Hargreaves, the company’s executive vice president and chief financial officer. “Our balance sheet is strong and we continue to generate good cash flow, which is being returned to shareholders via our increased dividend and the share buyback program.”
During the quarter, the board of directors increased next month’s quarterly dividend by 4 cents to 16 cents per share, the highest in company history. The company continued its buyback program, repurchasing about 2.5 million shares of common stock at a cost of $74 million.
The Hasbro execs’executives’ optimism was tempered by the knowledge that more than two-thirds of sales generally come in the second half of the year; first-quarter sales last year comprised only 15 percent of Hasbro’s annual revenue, Bloomberg said.
Rival Mattel Inc., the world’s largest toymaker, last week posted an unexpected first-quarter profit on its largest sales gain in more than eight years, Bloomberg said.
Hasbro Inc. (NYSE: HAS) – the world’s second-largest toymaker – is a designer, manufacturer and marketer of toys and games for all ages under brands including Playskool, Tonka, Milton Bradley, Parker Brothers, Tiger and Wizards of the Coast. Additional information is available at www.hasbro.com.
