Hasbro 3Q Profit Climbs 8.8% On Movie-Related Toy Sales

Hasbro Inc.'s (HAS) third-quarter profit climbed a bigger-than-expected 8.8% on higher margins and as the company's line of entertainment-related toys continued to buoy sales during the economic downturn.

President and Chief Executive Brian Goldner added that revenue growth for the year is possible if consumer trends continue "to improve in line with recent fourth quarter trends." The mean estimate of analysts surveyed by Thomson Reuters is 1% growth for the year to $4.06 billion.

Hasbro has weathered the recession better than some toy makers, posting strong sales boosted by toys that piggybacked the success of movie blockbusters such as "Transformers: Revenge of the Fallen." The company is looking to extend its sales success by continuing the entertainment-related strategy, offering toys based on Transformers, G.I. Joe, Star Wars and Marvel, for the holiday season. In contrast, Mattel Inc. (MAT) on Friday said its entertainment results weakened.

Hasbro said Monday its entertainment and licensing segment sales more than doubled for the quarter primarily because of Transformers- and G.I. Joe-related products.

The company reported earnings of $150.4 million, or 99 cents a share, up from $138.2 million, or 89 cents, a year earlier. Revenue fell 2% to $1.28 billion but gained 2% minus currency changes.

Analysts had forecast earnings of 93 cents on $1.32 billion in sales.

Gross margin rose to 57% from 55.9%.

Hasbro's U.S. and Canadian segment sales fell 3.6%, and international sales declined 3.6%, gaining 4% absent foreign-exchange impact.

The company said third-quarter earnings were cut 3 cents a share because of investments in its joint venture with Discovery Communications and Hasbro's virtual studio. Hasbro expects up to a 5-cent impact this quarter and 25 cents to 30 cents next year.

Shares of Hasbro closed at $29.52 Friday and didn't trade premarket.

-By Nathan Becker, Dow Jones Newswires; 212-416-2855; [e-mail]