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Hasbro (HAS) Beats Q3 Earnings, Revenue Estimates

Hasbro Inc.HAS posted decent third-quarter 2015 results with both earnings and revenues surpassing the respective Zacks Consensus Estimate.

Earnings and Revenue Discussion

Adjusted earnings per share of $1.58 beat the Zacks Consensus Estimate of $1.51 by 4.6% and increased 8.2% year over year.

Hasbro Inc. - Earnings Surprise | FindTheBest

Hasbro's net revenue of $1.47 billion remained flat year over year. However, excluding a negative $132.4 million impact from foreign exchange, revenues increased 9%. Further, revenues beat the Zacks Consensus Estimate of $1.46 billion by 0.7%. On a year-over-year basis, revenues at the Girls and Games categories declined, while that from Boys and Preschool categories improved.

Behind the Headline Numbers

Hasbro's product segments are Games, Girls, Preschool and Boys.

The Boys category posted revenue growth for the seventh consecutive quarter. Revenues were $593.1 million, up 24% year over year, driven by growth in Nerf and Star Wars products, and shipments of Jurassic World . However, these gains were partially offset by a decline at Transformers due to difficult year-over-year comparison.

Preschool category revenues climbed 17% to $219.6 million backed by growth in Play-Doh and brand shipments of Playskool's Jurassic World and Star Wars , along with the launch of Playskool My Little Pony . However, these positives were partially offset by declines at core Playskool products.

Games category revenues fell 8% to $363.5 million mainly due to revenue decline at Magic: The Gathering . It was, however, partly offset by revenue gains from brands like Monopoly and initial shipments of Playmation's Marvel's Avengers .

The Girls category revenues declined 28% year over year to $294.8 million - marking the fourth consecutive decline. Improvement in Play-Doh Dohvinci and shipments of Disney Descendants partially made up for the revenue declines at Furby, My Little Pony and Furreal Friends.

Regionally, net revenue from the U.S. and Canada segment increased 5% to $385.2 million, supported by growth in the Boys and Preschool categories. The segment reported operating profit of $187.1 million, up 10% year over year.

International segment revenues were $612.6 million, down 6% year over year. On an international basis, revenue declines at the Games and Girls categories were partially offset by increases in the Boys and Preschool categories. The negative impact of foreign currency hurt revenues in Europe, Latin America and Asia Pacific.

Excluding an unfavorable impact of foreign exchange, net revenue in the International segment grew 14% and approximately 12% in the emerging markets. International segment operating profit (including the negative Fx impact) was $114.2 million, down 2% year over year.

Entertainment and licensing segment revenues declined 2% year over year. The decline in revenues was primarily the result of a difficult comparison with Transformers related entertainment and licensing revenues. However, the segment's operating profit increased substantially to $16.2 million.

Hasbro's cost of sales ratio declined 160 basis points (bps) to 39.4%. Selling, distribution and administration expenses ratio increased 20 bps, while royalty expense ratio improved 130 bps. Operating profit rose 8.2% year over year to $303.5 million.

Hasbro carries a Zacks Rank #2 (Buy).

Stocks to Consider

Other stocks in the same industry that can be considered are Activision Blizzard, Inc. ATVI , Nintendo Co. Ltd. NTDOY and Glu Mobile, Inc. GLUU . While Activision Blizzard and Nintendo sport a Zacks Rank #1 (Strong Buy), Glu Mobile carries a Zacks Rank #2.

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HASBRO INC (HAS): Free Stock Analysis Report

ACTIVISION BLZD (ATVI): Free Stock Analysis Report

NINTENDO LTD (NTDOY): Free Stock Analysis Report

GLU MOBILE INC (GLUU): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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