JAKKS Pacific Inc.
), a multi-brand company that designs and markets a broad range of
toys and consumer products, is slated to release its second-quarter
2012 results on Tuesday, April 17, before the opening bell. The
Zacks Consensus Estimate projects earnings of 12 cents per share
for second quarter 2012 on revenues of $137.0 million.
With respect to earnings surprises over the trailing four
quarters, JAKKS has missed the Zacks Consensus Estimate in three
quarters and outperformed in one quarter. The earnings surprise
ranges from negative 14.8% to positive 6.8%, with the average at
negative 5.0%. This indicates that the company has missed the Zacks
Consensus Estimate by the same magnitude over the last four
First Quarter Recap
JAKKS reported adjusted loss of 65 cents per share, wider than
the Zacks Consensus Estimate of a loss of 61 cents. The quarterly
results not only deteriorated from year-ago earnings of 40 cents
per share but were also below management's guidance range of loss
of 61 cents to 64 cents.
The lower-than-expected results were due to additional operating
expenses associated with the recent acquisition of Moose Mountain,
as well as marketing expenses associated with the launch of the
Monsuno product line.
The company's revenue nudged up 1.5% year over year to $73.4
million but gross margin plunged 150 basis points to 32.1%.
For 2012, JAKKS forecasts adjusted earnings in the range of
$1.01 - $1.07 per share. The company expects total sales in the
range of $720-$728 million, implying a growth of 6.2% to 7.4%.
The analysts covered by Zacks expect JAKK to post earnings of 12
cents per share in the second quarter of fiscal 2012, lower than
the year-ago earnings of 16 cents. Currently, the Zacks Consensus
Estimate ranges between 2 cents and 20 cents a share.
Estimates Revisions Trend
Estimates have not budged in the last 60 days, implying that the
analysts are maintaining their outlook post first quarter
Agreement of Estimate Revisions
In the last 30 and 7 days, none of the 6 analysts covering the
stock revised their estimates for the second quarter and fiscal
2012, implying the lack of near-term catalyst to effect the
estimates. Moreover, over the past 30 and 7 days, none of the
analysts moved the estimates upward or downward for fiscal
Magnitude of Estimate Revisions
In the last 60 days, estimates for second quarter 2012, fiscal
2012 and 2013 remained unchanged at 12 cents, $1.09 and $1.31,
respectively, indicating that the analysts expect the company to
report in line.
We remain optimistic about its long-term growth potential with
product launches, possible acquisitions, resolution of litigation
and a strong financial condition. The company anticipates an
improved retail atmosphere in 2012. We expect the company to draw
considerable attention in 2012 from one overseas property called
Monsuno and other initiatives in doll segments. The company also
initiated a dividend program in the third quarter of 2011, equating
to an annual dividend of 40 cents per share.
However, faltering consumer confidence, wage inflation in China
and higher dependence on new products and new licenses make us
skeptical on the stock. Moreover, foreign currency headwinds
further add to the concern as the majority of the toys in the world
are produced in China.
Accordingly, the company has a Zacks #3 Rank (short-term Hold
rating) and a long-term Neutral recommendation.
Mattel, one of JAKKS' primary competitors, is slated to release
its second quarter 2012 results on the same day. JAKKS' other
) will report its second quarter 2012 results on July 22, 2012.
HASBRO INC (HAS): Free Stock Analysis Report
JAKKS PACIFIC (JAKK): Free Stock Analysis
To read this article on Zacks.com click here.