PAWTUCKET — Hasbro Inc. today said its profit in the first three months of the year plunged 47 percent compared with a year earlier, as consumers spent less on toys and overseas revenue was hurt by the declining value of the U.S. dollar.
Hasbro (NYSE: HAS) posted a first-quarter profit of $19.7 million, or 14 cents a share, compared with $37.5 million, or 25 cents a share, a year earlier.
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The Pawtucket-based toymaker’s quarterly revenue fell 12 percent to $621.3 million, compared with $704.2 million in the first three months of 2008. The company said revenue was off by only 6 percent before currency conversions.
“As we communicated earlier this year, we expected revenues to decline in the first quarter due to economic challenges, the impact of foreign exchange and retailers reducing inventory levels,” Brian Goldner, Hasbro’s president and CEO, said in a statement.
Hasbro’s results were in line with analysts’ expectations, according to a Thomson Reuters survey which found consensus forecasts of a 14 cent profit on revenue of $644.9 million, according to The Associated Press.
Hasbro’s results also were better than those of its larger archrival Mattel Inc., which on Friday posted a first-quarter loss of $51 million.
David Hargreaves, Hasbro’s chief operating officer and chief financial officer, said he believed the worst was over for the company. “Based on the strength of our product line, we believe the two most recent quarters will prove to have been the most challenging for Hasbro in this economic cycle,” he said in a statement. “Our balance sheet is strong and we remain focused on investing in our global business for the long term.”
Goldner said Hasbro, the world’s second-largest toymaker, has high hopes for new products that will be released later this year, particularly those tied to the upcoming “Transformers,” “G.I. Joe” and “Wolverine” movies.
That outlook is echoed by Chris White, an analyst at Los Angeles-based Wedbush Morgan Securities, who said in a note to clients last week: “Unlike many consumer companies, Hasbro has an unusual degree of visibility in 2009,” adding that all three movies could be blockbusters, Bloomberg News reported.
In North America, Hasbro’s profit increased to $41.6 million from $37.3 million a year ago, even as quarterly sales declined by 5.6 percent to $404.5 million. The company said sales of board games and Star Wars, Playskool and Nerf products grew while sales of Littlest Pet Shop, Transformers and Marvel products fell.
Hasbro’s international results swung to a loss of $14.5 million during the quarter compared with a year-ago profit of $13 million. Revenue dropped from $248.3 million in the first three months of 2008 to $189.2 million this year. The company said $36.1 million of that change was due to changes in exchange rates.
Hasbro shares started the day higher in early-morning trading on the New York Stock Exchange, but later fell along with the broader market. The stock was down by more than 3 percent, to $27.06 a share, at 10:58 a.m.
In 2008, Hasbro posted an annual profit of $306.8 million on $4 billion in sales.
For more information, visit Hasbro.com/corporate.
