Markets
HAS

Will Hasbro (HAS) Disappoint Investors this Earnings Season?

One of the leading toymakers Hasbro, Inc.HAS is scheduled to report fourth-quarter and full-year 2016 results on Feb 6, before the opening bell.

Last quarter, Hasbro posted a positive earnings surprise of 16.67%. In fact, the company's earnings surpassed the Zacks Consensus Estimate in all the last four quarters, with an average beat of 21.76%.

Let's see how things are shaping up for this announcement.

Hasbro, Inc. Price and EPS Surprise

Hasbro, Inc. Price and EPS Surprise | Hasbro, Inc. Quote

Factors to Influence Q4 Results

Hasbro's earnings and revenues surpassed the Zacks Consensus Estimate in all the trailing seven quarters. Strategic partnerships, rapid growth in emerging markets and a strong product lineup along with various sales-building initiatives have been driving top and bottom lines and are also expected to boost fourth-quarter results. Increased investments in digital gaming market are further likely to propel the quarter's results.

Notably, the Boys segment posted revenue growth for the eleventh consecutive quarter in the third quarter and is expected to continue witnessing strong growth in the to-be-reported quarter. However, despite the Girls segment making a turnaround in the first three quarters of 2016 after a dreadful 2015, it remains to be seen if it can maintain its performance in the fourth quarter.

Moreover, in spite of Hasbro's efforts to boost sales, all its brands are yet to reap benefits. Thus, weak performances by some of its brands like Jurassic Park, Playskool Heroes and core Playskool items might somewhat dent the quarter's performance.

Also, costs related to initiatives undertaken to boost business and unfavorable foreign exchange translations might affect the to-be-reported quarter's profits. Additionally, a challenging retail environment for toys in the U.S. may limit top-line growth.

Earnings Whispers

Our proven model does not conclusively show that Hasbro is likely to beat the Zacks Consensus Estimate in the quarter under review. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as elaborated below.

Zacks ESP : Hasbro has an Earnings ESP of -1.55%. This is because the Most Accurate estimate stands at $1.27, whereas the Zacks Consensus Estimate is pegged higher at $1.29. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Hasbro has a Zacks Rank #3 which increases the predictive power of ESP. However, the company's negative ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

MGM Resorts International MGM has an Earnings ESP of +50.00% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Marriott International, Inc. MAR has an Earnings ESP of +1.21% and a Zacks Rank #2.

Time Warner Inc. TWX has an Earnings ESP of +1.68% and a Zacks Rank #3.

Zacks' Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?

Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MGM Resorts International (MGM): Free Stock Analysis Report

Time Warner Inc. (TWX): Free Stock Analysis Report

Marriott International (MAR): Free Stock Analysis Report

Hasbro, Inc. (HAS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

HAS MAR MGM

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More