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Hasbro’s profits, sales rise in Q2

By Staff -- Gifts and Dec, 7/20/2009 6:33:00 AM

Hasbro PAWTUCKET, R.I.—Hasbro reported a nearly 5 percent gain in second quarter profit on the heels of a forex-impacted 1 percent increase in revenue.

Hasbro’s net earnings for the quarter were $39.3 million, or $0.26 per diluted share, up from $37.5 million, or $0.25 per diluted share, in the corresponding period of 2008. The 2009 second quarter results include a $0.06 per share dilutive impact from the company’s investment in a joint television venture with Discovery Communications, inclusive of one-time deal expenses and financing costs associated with its recent issuance of long-term debt. It achieved an operating profit of $73.1 million, up from $65.6 million in 2008’s Q2.

The toymaker’s net revenue for the quarter was $792.2 million, up from $784.3 million a year ago, an increase of 1 percent. Excluding the negative impact of $44.5 million in foreign exchange costs, net revenue increased 7 percent.

“Hasbro performed well in what continues to be a challenging global environment," said Brian Goldner, Hasbro’s president and CEO. "Our ability to deliver growth in both revenue and earnings per share, while including the dilution from the investment in our joint venture with Discovery Communications, was due to broad based strength across Hasbro’s core brand product portfolio and strong execution globally."

Revenue from Hasbro’s U.S. and Canada segment was $490.9 million, compared to $467.7 million in 2008, helped by growth for Transformers, G.I. Joe, Little Pet Shop, Nerf, Play-Doh, Furreal Friends and Tonka toys. The segment reported an operating profit of $56.3 million, compared to a profit of $43.7 million in 2008.

International segment net revenues were $276.2 million, down from $293.7 million in 2008, as negative foreign exchange rates diminished returns by approximately $42.8 million. The company’s overseas business reported an operating profit of $16.5 million compared to operating profit of $14.0 million in 2008.

Its Entertainment and Licensing segment, which includes television, movies, lifestyle and digital licensing and on-line entertainment operations, tallied net revenue worth $24.2 million, up from $21.3 million in 2008. The results reflect increased demand for Transformers, G.I. Joe and Nerf products, Hasbro said. The Entertainment and Licensing segment reported an operating profit of $2.9 million compared to operating profit of $8.0 million in 2008, with results hurt by one-time expenses associated with the investment in the joint venture with Discovery Communications.

“For the remainder of this year, we will continue to invest in our business and closely manage our expenses,” said Goldner. “While there are challenges in 2009, we believe that the underlying strength of our brands and our commitment to our strategy should enable Hasbro to grow revenue and earnings per share, including the impact of our television investment—absent a material deterioration in the global economy and the value of foreign currencies.”

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