Hasbro Third-Quarter Earnings Rise Amid Stronger 'Transformers,' 'Star Wars' Toy Sales
Toy giant Hasbro on Monday reported slightly improved third-quarter financials that topped Wall Street expectations, citing higher entertainment revenue and stronger sales of Transformers and Star Wars toys.
But the company also cited Marvel and other boy-focused toys as areas that continue "to face difficult comparisons with 2012."
Hasbro posted adjusted earnings of $172.5 million, up 5 percent over the year-ago period. Revenue increased 2 percent to $1.37 billion. U.S. revenue fell 5 percent, but international grew 11 percent.
Entertainment and licensing segment revenue jumped 13 percent to $48.6 million, "primarily driven by higher entertainment revenues as well as the addition of [mobile game maker] Backflip Studios," in which Hasbro acquired a majority in July, the company said. But entertainment and licensing operating profit of $7.6 million was down from $10.7 million in 2012 due partly to the acquisition.
Revenue in the boys toy category decreased 17 percent as Transformers and Star Wars revenue grew in the quarter, but Marvel and Beyblade product "continued to face difficult comparisons with 2012," the firm said.
Hasbro's games unit posted its fourth consecutive quarter of revenue growth, driven by Magic: The Gathering and the new Telepods gaming platform, featuring the Angry Birds: Star Wars II game.
"Our brand initiatives for holiday 2013 are resonating with consumers and retailers globally as we enter the all important fourth quarter," said Hasbro CEO Brian Goldner. "In addition to our innovative holiday launches, our expanded presence in faster growing geographies is delivering growth, including emerging markets growth of 22 percent in the third quarter."
He added: "We've also streamlined our organization and focused on the opportunities within our franchise and partner brand portfolio which offer the greatest long-term potential across our global brand blueprint. These strategic steps are increasingly important as we continue to operate in a challenging consumer environment in developed economies."
MKM Partners analyst Eric Handler called the results "slightly better than projected."