Hasbro 2Q Profit Up 4.8% On Strong Toy Sales

 DOW JONES NEWSWIRES 
 

Hasbro Inc.'s (HAS) second-quarter earnings rose 4.8% amid strong sales of most of its toy brands, including those related to the Transformers movie sequel, but revenue fell just short of Wall Street's expectations while profit topped estimates.

Toymakers' sales had slumped in recent quarters as consumers spend less and a rebound isn't seen anytime soon. For its part, Hasbro is placing its hopes on toys tied to the smash "Transformers: Revenge of the Fallen" to boost sales. Much of Hasbro's recent growth stems from its success featuring its toys in hit movies as its lineup includes G.I. Joe, Star Wars and Spider-Man products. A G.I. Joe movie is coming up next month.

Rival Mattel Inc. (MAT) on Friday reported another quarter of slumping sales, partly attributing it to lack of toys tied to summer entertainment, though its bottom line benefitted from cost cuts.

Hasbro reported a profit of $39.3 million, or 26 cents a share, up from $37.5 million, or 25 cents a share, a year earlier. The latest period included a 6 cent charge related to its joint venture with Discovery Communications Inc. (DISCA).

Revenue increased 1% to $792.2 million, but rose 7% in constant currency.

Analysts polled by Thomson Reuters most recently were looking for earnings of 23 cents on revenue of $797 million.

Gross margin fell to 59.7% from 60.7%.

In its U.S. and Canadian segment sales rose 4.8%. International sales declined 9.9%, hurt by foreign currency effects.

Hasbro in April unveiled a pricey joint venture that will give it shared control with Discovery of a new cable-TV network and Web site for children based on Hasbro brands and the Discovery Kids network.

Shares closed at $25.38 on Friday and didn't trade premarket The stock is down by roughly a third in the past year.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]