Hasbro Posts $32.9 Million Profit in First Quarter

[dougmander]

from AP, via the New York Times:

Hasbro Posts $32.9 Million Profit in First Quarter

By THE ASSOCIATED PRESS
Published: April 23, 2007
Filed at 9:41 a.m. ET

PAWTUCKET, R.I. (AP) -- Hasbro Inc., the nation's second-largest toymaker, said Monday that it swung to a first-quarter profit on growth in its Marvel product line and core brands such as Littlest Pet Shop, Nerf and Play-Doh.

Its shares rose $1.04, or 3.4 percent, to $31.25 in premarket trading.

The company reported a profit of $32.9 million, or 19 cents per share, for the three months ended April 1 versus a loss of $4.9 million, or 3 cents per share, in the year-ago period.

Analysts polled by Thomson Financial expected the company to break even on a per-share basis.

Hasbro said it had growth in several brands including My Little Pony, Playskool, Transformers and board games.

Quarterly revenue rose 34 percent to $625.3 million from $468.2 million, beating Wall Street's estimate of $507.9 million.

North American segment revenue climbed 36 percent to $421.1 million, while international segment revenue increased 20 percent to $187.7 million.

Hasbro is the nation's second biggest toymaker after Mattel Inc.

Mattel last week said its earnings fell to $12 million, or 3 cents per share, from $30.2 million, or 8 cents per share, during the same period of 2006. Revenue, meanwhile, climbed 19 percent to $940.3 million.

Shares of Hasbro began on Monday trading up $2.25, more than 7 percent higher, at $32.46 on the New York Stock Exchange.

 

[delericho]

Good for them, I guess. With the Transformers movie about to hit, they should do quite well this summer, I think.

 

[Holy Bovine]

And...?

 

[Enforcer]

"Major company endeavors to make money and uphold responsibility to shareholders. In other news, water is wet." Is this some attempt to make Wizards (and/or Hasbro) out to be Evil Money-Grubbers, Inc.? If so, I find that silly. If not, then my apologies for assuming the worst--the dire predictions of doom and gloom recently have made me pessimistic of people's intentions with their posts.

I can't help but notice the total lack of any mention of Wizards of the Coast products in the article. I don't imagine that Wizards of the Coast accounts for a big part of Hasbro's bottom line, and I'm guessing D&D doesn't compare to Magic: The Gathering even within Wizards of the Coast.

To back that claim up, let's look at Hasbro's 10-K (annual report filed with the SEC) filed on Feb. 28, 2007 (i.e. not very long ago): "No individual line of products accounted for 10% or more of our consolidated net revenues during our 2006 or 2004 fiscal years. During the 2005 fiscal year, revenues generated from the sale of STAR WARS products produced under our license with Lucas Licensing and Lucasfilm were approximately $494,000, which was 16% of our consolidated net revenues in 2005. No other line of products constituted 10% or more of our consolidated net revenues in 2005." So no, not a huge impact by Wizards or D&D as a brand. Considering Hasbro sells Nerf, Star Wars, My Little Pony, Playskool, and Transformers and none of them* count for 10% or more of net revenues, how significant do we think D&D can be?

Also: "These increases [in North American net revenues] were partially offset by decreased games sales in 2005, primarily MAGIC: THE GATHERING and DUEL MASTERS trading card games." Ouch, looks like decreases in Magic sales actually hurt Hasbro's net revenues. Still no mention of D&D as far as revenues go.

And: "In addition, the Company and Infogrames entered into a new licensing agreement that provides Infogrames exclusive rights to DUNGEONS & DRAGONS and rights to nine other properties for a limited number of platforms." This is one of two mentions of D&D in the whole report--that Infogrames has exclusive license to video games based on the D&D brand.

The other is: "WIZARDS OF THE COAST offers a variety of successful trading card and roleplaying games, including MAGIC: THE GATHERING and DUNGEONS & DRAGONS. We seek to keep our core brands relevant through sustained marketing programs as well as by offering consumers new ways to experience them."

"New ways to experience them" might mean "digital initiative," but this is standard "Rah Rah!" positive language for the shareholders and analysts.

My personal conclusion? D&D isn't mentioned at all as far as financial impact. As gamers we are passionate enthusiasts in a dearly-beloved hobby, but our hobby doesn't account for much at all in the grand scheme of things and as such we need to get over ourselves as being vital to Hasbro and their shareholders. Personally, I'm happy there's a gaming industry at all to keep me and my group happy for a few hours on any given Sunday. And so long as Hasbro exceeds Wall Street's expectations, the less likely they'll cut less significant brands such as D&D. I read this article as damn good news for our hobby.

*With the exception of Star Wars in 2005 only, when it accounted for 16% of net revenues, as mentioned in the above quote.

 

[Festivus]

As a parent of two youngsters ages 3.5 and 1, I can tell you that I personally account for about 1% of the total revenue stream Hasbro makes. If they got into the diaper market they would have a slam dunk profit from me.

 

[Thornir Alekeg]

Good for them, I guess. With the Transformers movie about to hit, they should do quite well this summer, I think.

Transformers should help, but Spiderman 3 will probably do even more.

 

[delericho]

Transformers should help, but Spiderman 3 will probably do even more.

True, that. I wasn't aware Hasbro made the Spider Man toys, whereas Transformers was listed in the first post.

 

[Estlor]

The lack of mention of D&D should come as no surprise. Hasbro purchased WotC to consolidate the Pokemon license much in the same way they purchased Galoob ages ago to consolidate the Star Wars license.

As an aside, Hasbro has done a wonderful job messing with Spider-Man toy collectors. The entire Spider-Man 3 line is a completely different scale than everything Toy Biz (and even Hasbro itself) has ever done in the Marvel Legends style. But that shouldn't surprise me. TransFormers has had goofy scale issues since the '80s.

 

[w_earle_wheeler]

As a parent of two youngsters ages 3.5 and 1, I can tell you that I personally account for about 1% of the total revenue stream Hasbro makes. If they got into the diaper market they would have a slam dunk profit from me.

Hasbro should have WotC develop a collectible diaper line. You never know what kind of diaper you're going to get. It might be made out of tissue paper, but every blue moon you'll get an awesome foil holographic diaper.