Jakks Pacific 3Q profit rises, shares jump
EmptyNEW YORK -- Toy company Jakks Pacific Inc. Thursday reported higher-than-expected quarterly profit and reiterated its full-year forecast, sending its shares up as much as 21%.
The maker of Care Bears and Plug It In & Play TV games reported third-quarter net income of $40.5 million, or $1.26 per share, compared with $32.8 million, or $1.05 per share, a year earlier.
Excluding charges for stock-based compensation and acquisition-related amortization, the company said earnings were $43.6 million, or $1.35 per share, up from $33.5 million, or $1.07 per share, a year ago.
Analysts on average had been expecting profit of $1.18 per share, according to Reuters Estimates.
Sales jumped 27% to $295.8 million, beating analysts' targets of $276.04 million, helped by strong sales from its acquisition of Creative Designs International, which makes dress-up and role-playing toys.
Jakks also reiterated its 2006 forecast for sales of roughly $775 million and earnings per share of approximately $2.32.
That compares with analysts' average expectation of sales of $741.5 million and earnings of $2.14 per share.
"I would say the stock is up because they reiterated their guidance, and ....maybe some short covering going on," said Sean McGowan, a toy analyst with Wedbush Morgan Securities.
Shares of Jakks had fallen 13% through Wednesday from the start of the year as the toy company has contended with shipment delays and sales shortfalls in products like its Fly Wheels and TV games, and cut its outlook.
Separately, THQ Inc. and Jakks Pacific LLC said World Wrestling Entertainment Inc. filed a lawsuit against them on Oct. 12 in a Connecticut state court.
The companies said the suit concerns allegedly improper sales of WWE video games in Japan and other countries in Asia, and seeks to terminate the video game license and monetary damages.
Jakks has been WWE's toy licensee since 1995, and the joint venture of Jakks and THQ obtained a video game license in 1998. But THQ and Jakks have been involved in an ongoing legal dispute with WWE over how certain licenses were secured.
The licensing deals are an important source of revenue for Jakks, and investors have kept an eye on the ongoing dispute.
THQ and Jakks said they believed the latest lawsuit was without merit.
Jakks shares, which traded as high as $22.04 on Thursday, were up $3.43, or 18.9%, to $21.63 in afternoon Nasdaq trading.