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Despite Down Quarter, Hasbro Plays Well
Hasbro (NYSE:HAS) reported a fourth quarter with lower earnings and revenues as its toy sales sagged near the end of the year. While the company pre-announced its numbers would be lower than originally expected, it still produced a largely positive 2010.
IN PICTURES: 5 Investing Statements That Make You Sound Stupid
Sales Tail Off
Softness in board games sales were part of a lag in year end business.Games and puzzles sales were off 22% for the quarter.Overall sales for the quarter were $1.28 billion compared to $1.38 billion in the fourth quarter a year ago. International sales and cost cutting helped offset some of the quarter's slowdown. Net income was $140 million for the quarter or 99 cents a share, down from $165.6 million or $1.09 per share in the year ago quarter.
Full Year Better
Although 2009 sales were driven by Transformers and G.I. Joe, the company still increased its 2010 earnings without the extra push of movie releases. Net income was $397.8 million or $2.74 per share, compared to $374.9 million or $2.48 per share. Girls and preschool categories both increased sales for the year, while boys categories along with puzzles and games declined. Overall sales declined slightly to $4 billion from $4.07 billion.
Toy Rivals
Mattel (NYSE:MAT) reported a mixed fourth quarter with strong full year earnings. as its Barbie line led the way. Leapfrog Enterprises (NYSE:LF) lowered its guidance, but this was a downshift from originally high numbers. Meanwhile, RC2 (Nasdaq:RCRC) and Jakks Pacific (Nasdaq:JAKK) are doing well. Despite the relatively unimpressive fourth quarters of Mattel and Hasbro, the toymakers are coming back.
Hasbro In 2011
Lowered analyst estimates on Hasbro still call for EPS of $3.12 for the full year 2011, even with first quarter softness, and $3.70 in 2012. These still represent meaningful increases over 2010's $2.74.
Hasbro continues to develop its Hub TV with Discovery Communications (Nasdaq:DISCA), which Hasbro regards as part of a larger, longer term strategic plan. On the all important toy front, Hasbro should benefit from the upcoming "Transformers: Dark of the Moon" movie to be released in July. Along with this are tie-in deals with Marvel for its movies "Thor" in May and "Captain America" in July.
Hasbro For Investors
Long term fundamental investors should look at Hasbro's fourth quarter in light of its 10 years of consecutive EPS growth, healthy margins and great brands. Toys such as Play-Doh, Tonka, board games like Scrabble and so many others provide a legacy. On top of that, add the infusion of the Transformers and Marvel toys. Hasbro, like Mattel, is a leader in an evergreen industry that is regaining its health. The harsh recession even hurt toys, but Hasbro is there as a way to play returns. (For related reading, also take a look at 5 Amusing Stocks That Aren't Having Any Fun.)
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IN PICTURES: 5 Investing Statements That Make You Sound Stupid
Sales Tail Off
Softness in board games sales were part of a lag in year end business.Games and puzzles sales were off 22% for the quarter.Overall sales for the quarter were $1.28 billion compared to $1.38 billion in the fourth quarter a year ago. International sales and cost cutting helped offset some of the quarter's slowdown. Net income was $140 million for the quarter or 99 cents a share, down from $165.6 million or $1.09 per share in the year ago quarter.
Full Year Better
Although 2009 sales were driven by Transformers and G.I. Joe, the company still increased its 2010 earnings without the extra push of movie releases. Net income was $397.8 million or $2.74 per share, compared to $374.9 million or $2.48 per share. Girls and preschool categories both increased sales for the year, while boys categories along with puzzles and games declined. Overall sales declined slightly to $4 billion from $4.07 billion.
Mattel (NYSE:MAT) reported a mixed fourth quarter with strong full year earnings. as its Barbie line led the way. Leapfrog Enterprises (NYSE:LF) lowered its guidance, but this was a downshift from originally high numbers. Meanwhile, RC2 (Nasdaq:RCRC) and Jakks Pacific (Nasdaq:JAKK) are doing well. Despite the relatively unimpressive fourth quarters of Mattel and Hasbro, the toymakers are coming back.
Hasbro In 2011
Lowered analyst estimates on Hasbro still call for EPS of $3.12 for the full year 2011, even with first quarter softness, and $3.70 in 2012. These still represent meaningful increases over 2010's $2.74.
Hasbro continues to develop its Hub TV with Discovery Communications (Nasdaq:DISCA), which Hasbro regards as part of a larger, longer term strategic plan. On the all important toy front, Hasbro should benefit from the upcoming "Transformers: Dark of the Moon" movie to be released in July. Along with this are tie-in deals with Marvel for its movies "Thor" in May and "Captain America" in July.
Hasbro For Investors
Long term fundamental investors should look at Hasbro's fourth quarter in light of its 10 years of consecutive EPS growth, healthy margins and great brands. Toys such as Play-Doh, Tonka, board games like Scrabble and so many others provide a legacy. On top of that, add the infusion of the Transformers and Marvel toys. Hasbro, like Mattel, is a leader in an evergreen industry that is regaining its health. The harsh recession even hurt toys, but Hasbro is there as a way to play returns. (For related reading, also take a look at 5 Amusing Stocks That Aren't Having Any Fun.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Greg Sushinsky
Greg Sushinsky is a passionate independent investor, who has done his own research, analysis and investing for 20 years. One of his earliest investing memories was when he first saved and bought U.S. Savings Bonds with his own money as a small child. From there, he studied investing on his own and made small stock purchases as he grew as an investor.
Sushinsky still follows the markets, studies and reads widely in financial literature, and has written over 75 articles on investing. He is also a professional editor, whose work is published extensively in large-circulation magazines, digests and across the internet. In other pursuits, Sushinsky writes fiction and has a university degree in philosophy. To see more of Sushinsky's literary work, see http://writing.gregsushinsky.com/.
Sushinsky still follows the markets, studies and reads widely in financial literature, and has written over 75 articles on investing. He is also a professional editor, whose work is published extensively in large-circulation magazines, digests and across the internet. In other pursuits, Sushinsky writes fiction and has a university degree in philosophy. To see more of Sushinsky's literary work, see http://writing.gregsushinsky.com/.
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