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Toy giant Hasbro on Monday posted second-quarter financial results that missed Wall Street forecasts for earnings and revenue as the novel coronavirus pandemic caused production delays, hitting its Entertainment One film and TV division, and delays in its movie releases amid cinema closures.
Hasbro swung to a quarterly loss of $33.9 million, or 25 cents a share, compared to earnings of $13.4 million, or 11 cents a share, in the same period of 2019. Stripping out one-time acquisition-related expenses, including severance and amortization, at eOne, Hasbro recorded adjusted earnings of $2.7 million, or 2 cents per diluted share.
Analysts had forecast earnings of 23 cents for Hasbro on revenue of $992 million, according to IBES data from Refinitiv. Hasbro’s revenue for the second quarter fell by nearly 13 percent to $860.3 million from the year-ago figure of $984.5 million.
“The second quarter was much as we expected: strong point of sale for Hasbro brands countered by a very challenging revenue period due to global closures in our supply chain, across retailers as well as in entertainment production,” said Brian Goldner, Hasbro’s chairman and CEO.
At eOne, production shutdowns and theater closures brought on by the coronavirus spread led pro forma revenue to fall by 32 percent to $132.2 million. TV and film revenues were $106 million during the latest quarter, compared with $160 million in the year-ago quarter, while music revenue fell to $26 million from $30 million.
Hasbro reported viewership and demand for eOne content was up during the latest quarter. But the studio’s release schedule has been shifted to late 2020 and into 2021 as live-action production in the TV and film space was shuttered.
eOne has started to resume production on scripted and unscripted series in Canada and the U.K., and the company awaits a production relaunch in the U.S. market later this year. Hasbro executives on a morning analyst call said the cash investment in eOne content in 2020 will fall by around $200 million to a range between $450 million and $550 million, due to the impact of coronavirus-era production shutdowns and the timing of deliveries as production gets back on track.
The theater closures around COVID-19 lockdowns have also shifted the release dates on Hasbro films into 2021. Goldner told analysts that a new G.I. Joe movie in the works along with Paramount is now targeting a theatrical release next year after initially eyeing an October 2020 roll-out delayed by the pandemic.
“We’re working out the specifics with Paramount,” Goldner told analysts. Lorenzo di Bonaventura, who produced Snake Eyes: G.I. Joe Origins and is also producing various projects based on Hasbro’s Transformers brand, will produce the relaunch of the franchise with Hasbro’s arm, Allspark Pictures.
Despite the pandemic, animation production at eOne remained active, including for Peppa Pig, PJ Masks and the 2021 My Little Pony animated feature film. eOne has around 100 TV projects in development and another 40 movie projects in its pipeline, including projects around more than 32 Hasbro properties, including Dungeons and Dragons.
July 27, 6:30 a.m. Updated with comments by Hasbro executives made during an analyst call.
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