Leading toy maker,
), recently extended its multi-year licensing agreement with
The Walt Disney Company
). Per the contract, Hasbro will continue to design and market
toys and games modeled on Marvel's portfolio of characters. The
toy maker will pay $80 million as royalty fee to Disney for
extending its association with Marvel for two more
Hasbro is also considered as the premier licensee for Disney's
another popular entertainment property -Star Wars - till 2020.
The Lucasfilm acquisition in late 2012 led to the incorporation
of the world-famous film series and media franchisee - Star Wars
- into Disney's entertainment portfolio. Since both the Lucasfilm
and Marvel agreements cover the similar grounds and are valid
through 2020, the terms and conditions of the deals were
In addition, Disney will receive $225 million from Hasbro
following the release of three Star Wars films, the first of
which is slated for a 2015 release.
High demand for Marvel characters has made it a lucrative
target for Hasbro. Management believes that this deal will
enhance the company's coverage in the industry.
This news came in the day company released its second-quarter
2013 results. Hasbro second-quarter 2013 adjusted earnings per
share of 29 cents fell short of the Zacks Consensus Estimate by
17.1% and the year-ago level by 12.1%. A sluggish top line
combined with operating margin pressure resulted in the
year-over-year decline in earnings. Hasbro's net revenue of
$766.3 million declined 6% from the year-ago quarter, mainly hurt
by persistent weakness in the Boys Category which accounts for
about one-third of total revenue. In such a situation, enhancing
the association with Disney will allow Hasbro to boost investors'
Hasbro currently carries a Zacks Rank #3 (Hold). Some toy
companies that are currently performing well are
Activision Blizzard, Inc.
LeapFrog Enterprises Inc.
) both carrying a Zacks Rank #2 (Buy).
ACTIVISION BLZD (ATVI): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
HASBRO INC (HAS): Free Stock Analysis Report
LEAPFROG ENTRPS (LF): Free Stock Analysis
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