) has reported first quarter 2012 adjusted earnings per share of 4
cents, which lagged the Zacks Consensus Estimate of 7 cents. The
earnings were also below the year-ago level of 12 cents. On a GAAP
basis, Hasbro reported a 2 cents loss in the quarter.
Hasbro's net revenue of $648.9 million slid 3.0% from the
year-ago quarter and also missed the Zacks Consensus Estimate of
$670.0 million. Foreign exchange had an unfavorable impact of $8.5
million. Revenue could not utilize one extra week of operation in
the first quarter of 2012 compared to the year-earlier quarter.
After an outperformance for quite some time, the Transformers
and Beyblade brands were flat in the quarter. Entertainment backed
brands like Marvel, Star Wars, Kre-O were the factors to be thanked
for the contribution to revenue.
Hasbro continued to return value to investors in the form of a
share repurchase and dividend distribution.
Hasbro experienced worldwide net revenue growth in two of its
four major product categories, namely Boys and preschool which
inched up a respective 4% and 2% to $302.8 and $69.9 million, on an
annualized basis. On the other hand, Girls and Games categories
fell 18% to $93.2 million and 9% to $181.9 million,
Geographically, net revenue from the U.S. and Canada segment
declined 16% year over year to $329.0 million, while its operating
profit registered a steeper decline of 65% to $14.4 million. The
International segment reported net revenue of $289.7 million, up
14% year over year. The segment's operating loss was $5.1 million
versus $1.7 million loss recorded in the year-ago quarter.
The Entertainment and Licensing segment experienced a 19%
year-over-year jump in revenue to $29.3 million. But the segment's
operating profit showed a greater increment of 42% to reach $7.7
We noticed a 21.3% rise in Hasbro's royalty expenses from the
prior-year period to $21.3 million. Product development expenses
totaled $44.9 million, down 2.0% year over year. Advertising
expenses decreased 2.3% from the prior-year quarter to $65.0
million. Selling, distribution and administration expenses also
increased 7.5% to $199.9 million.
At quarter end, total assets were $3.88 billion compared with
$3.94 billion at the end of the year-earlier quarter. Hasbro's
long-term debt was $1.40 billion, almost flat year over year.
Hasbro repurchased a total of 139,656 shares during the quarter
at a total cost of $5.0 million. At quarter-end, $222.3 million
remained available in the current share repurchase
Management expects year-over-year growth in revenue and earnings
per share for 2012 excluding the impact of foreign currency
Hasbro's strong product line-up slated for the second half of
the year, strategic tie-ups, and its growing presence in emerging
geographical regions bode well for future growth.
However, the Consensus miss in the first quarter concern us a
bit. Management commented that this underperformance was expected
as it planned for a back-end loaded year.
Hasbro currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating. We are maintaining our long-term Neutral
recommendation on the stock. As a point of reference, one of
Hasbro's major peers
) missed the Zacks Consensus Estimate in its first quarter 2012
earnings per share and revenue.
HASBRO INC (
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