Hasbro Swings to First-Quarter Loss
Toy giant Hasbro on Monday said it swung to a first-quarter loss as it kicked off what it has said will be a year where most of the financial momentum will be concentrated in the back-half.
Transformers brand revenue was flat in the quarter as financials in the entertainment and licensing segment rose.
Hasbro posted a quarterly loss of $2.6 million, compared with a year-ago profit of $17.2 million. The firm recorded awnings of $5.1 million when excluding $11.1 million in severance costs. Revenue of $648.9 million dropped 3 percent.
Entertainment and licensing unit revenue increased 19 percent to $29.3 million, driven by the sale of TV programming in the U.S. and internationally. Operating profit in the segment amounted to $7.7 million, up from $5.4 million in the year-ago period.
Transformers brand revenue, including box office revenue from the franchise's latest release, was flat in the quarter, but down in the boys category, Hasbro said. The fourth-quarter DVD release and more retail product have helped financial trends, he said. As a result, Transformers revenue this year should end up down only around 30 percent from the year-ago movie release year, compared with the historically typical 50 percent drop.
"We are looking forward to the four major motion pictures coming to global audiences in the next few months as well as the launch of our all important fall and holiday initiatives in the second half of the year," said Hasbro president and CEO Brian Goldner. "In partnership with our retailers and supported by a strong line of new fall initiatives, our expectation remains that a higher percentage of full year revenues will be in the second half of the year versus past years. This shift in the timing of our business has a similar impact on profitability."
For the full year 2012, Hasbro reiterated its expectation that it would grow revenue and earnings per share.
Discussing the movie business, Goldner said that Battleship is "off to "a great early start" with nearly $130 million in global box office in the first 12 days, some of which will flow to the company's entertainment and locensing unit. He also suggested that the upcoming The Avengers, The Amazing Spider-Man and the G.I. Joe sequel look strong.
In other positive trends, kids TV network joint venture The Hub, in which Discovery Communications is the company's partner, once again saw ratings improvements in the first quarter.