Hasbro posts strong Q1 results
First-quarter earnings triple to $58.9 millionNEW YORK -- Toy giant Hasbro on Monday reported better-than-expected first-quarter earnings and once again touted its upcoming film and TV projects.
On the earnings conference call, chairman and CEO Brian Goldner said the company expects to present a more detailed programming lineup for The Hub, a kids network joint venture with Discovery Communications in a few weeks. The network set to launch on 10/10/2010 has held meetings with potential advertisers in recent weeks. "The reception has been very positive," said Goldner. While such kids market players as Cartoon Network have reported more sluggish ad momentum as of late, he said potential clients have highlighted the opportunity to fill a new niche in the kids space.
The Hub, which has been known as Discovery Kids so far, has been profitable. But interest expense on the debt incurred in the joint venture deal and hiring costs put a 4 cents drag on Hasbro's earnings per share in the fourth quarter. The rest of the year will see earnings dilution from the necessary marketing and rebranding expense, management reiterated Monday.
But Hasbro still sees revenue and earnings per share rising this year over 2009, including that dilution, despite less favorable currency trends.
The current second quarter sees the toughest comparisons with year-ago results, because 2009 featured the rollout of "GI Joe" and "Transformers" film-related toys.
Hasbro started shipping toys ahead of "Iron Man 2" in the first quarter. "All the indications are very positive," Goldner said.
He also touted such future releases as "Transformers 3," set for July 2011, "Stretch Armstrong" and "Battleship," for which production will start soon, he said.
Hasbro's first-quarter earnings tripled to $58.9 million thanks to games and puzzles, a rebound in girls toys, such as "My Little Pony" and "Littlest Pet Shop" and a tax benefit.
Quarterly revenue rose 8% to $672.4 million.
Rival Mattel had on Friday also reported better-than-expected results amid an improving economy.