PAWTUCKET – Transformers and Marvel’s Spider-Man again exercised their super-powers on Hasbro Inc. (NYSE: HAS) in the quarter ended Sept. 30. The toymaker today posted a third-quarter profit of $161.6 million, or 95 cents per diluted share, a 62.6-percent increase from the $99.6 million it reported in the year-ago period.
The 2007 third-quarter results include a favorable one-time tax adjustment of $29.6 million, or 17 cents per diluted share, while the year-ago results include a one-time expense of $19.8 million or 9 cents per diluted share from its repurchase of warrants issued to Lucas Licensing and Lucasfilm as part of Hasbro’s production of Star Wars-related products. Excluding those factors, Hasbro’s third-quarter profit increased 10.6 percent, to $132.0 million or 78 cents per diluted share from the year-ago $119.4 million.
That exceeded the 71 cents per share median prediction from a Bloomberg News survey of eight industry analysts.
“We are very pleased with our third-quarter and year-to-date performance, and we are well positioned for the all-important holiday season,” President and CEO Alfred J. Verrecchia said in a statement today. “Revenues were up 18 percent for the quarter and 25 percent year-to-date, as the business continues to be strong both in terms of category and geographic performance.” Net revenue for the quarter grew to $1.22 billion, an increase of $183.9 million from the year-ago $1.04 billion, and well above the Bloomberg survey’s $1.14 billion prediction.
Sales for the North American segment increased 10 percent to $822.7 million, led by increases in the Transformers and Marvel product lines, as well as gains in brands including Furreal Friends, Littlest Pet Shop, Baby Alive, My Little Pony, Nerf, Monopoly, Operation and Scrabble. International segment sales grew 33 percent to $347.0 million, reflecting about $21.7 million in gains from foreign exchange rates, as well as increased shipments in product lines including Transformers, Marvel, Littlest Pet Shop, My Little Pony, Playskool, Monopoly, Operation and The Game of Life.
“Operating profit was up significantly for the third quarter to $209.7 million,” or 17.1 percent of revenue, “an historical record for the company and further validation that our strategy of focusing on our core brands is working,” Verrecchia said. The North American segment posted an operating profit $134.0 million, or 20.1 percent more than a year-ago, while the International segment posted a 33.3-percent increase to $57.6 million.
“In light of our strong global cash flow generation and our expectations for the future, we continued to aggressively repurchase shares during the quarter,” noted David Hargreaves, Hasbro’s executive vice president and chief financial officer. During the third quarter, the company repurchased 12.9 million shares for $362.1 million, he said, “leaving $240.6 million in the current [buyback] authorization as of quarter end.”
“They come into the holiday season with a full portfolio of attractive products,” Thomas Russo, who manages $3.5 billion at Gardner Russo & Gardner, told Bloomberg News. The company, based in Lancaster, Pa., holds about 3.16 million Hasbro shares.
Hasbro Inc. (NYSE: HAS) is a world leader in the design, manufacture and marketing of traditional and high-tech games and toys under brands including Playskool, Tonka, Milton Bradley, Parker Brothers, Tiger and Wizards of the Coast. Additional information is available at www.hasbro.com.
