Business website, Bloomberg, has posted an article referring to the increase in Hasbro’s profits as a result of their action figure sales.
July 21 (Bloomberg) — Hasbro Inc., the maker of Monopoly and Clue board games, posted second-quarter profit that rose more than analysts estimated after the toymaker sold more Star Wars and Indiana Jones action figures.
Net income soared almost eightfold to $37.5 million, or 25 cents a share, following costs a year earlier to end part of a contract with “Star Wars” director George Lucas. Earnings beat analysts’ projections by 3 cents. Sales climbed 13 percent to $784.3 million, the world’s second-largest toymaker said today in a statement.
Revenue exceeded analysts’ estimates as consumers bought action figures tied to the “Iron Man” and Indiana Jones movies released earlier this year, as well as next month’s animated “Star Wars” film. Both Hasbro and Mattel Inc., which has the rights to Batman toys, have capitalized on a superhero- driven surge at the box office.
“Even though Hasbro has made tremendous strides in diversifying away from big movie-franchise toys, there’s no doubt right now they’re really being driven by that”, Chris White, an analyst at Wedbush Morgan Securities, said in a telephone interview.
Toys based on “Spider-Man 3” and “Iron Man” are part of a five-year licensing agreement with Marvel Entertainment Inc. Sales tied to last year’s “Transformers” film fell during the quarter, Hasbro said.
Hasbro, based in Pawtucket, Rhode Island, fell 17 cents to $37.82 at 9:37 a.m. in New York Stock Exchange composite trading. The shares climbed 49 percent this year before today, compared with an 8.5 percent gain at larger Mattel.
Hasbro raised prices to counter higher raw-material costs. Mattel said last week it implemented “mid-to-high-single digit” price increases on a percentage basis on June 1.
U.S. and Canadian sales advanced 11 percent at Hasbro to $467.7 million, helped by Nerf sports toys, the Easy-Bake Oven and board games including Trivial Pursuit. Overseas revenue gained 15 percent to $293.7 million, 9 percentage points of which came from currency changes.
Ten analysts surveyed by Bloomberg estimated average profit of 22 cents a share. Eight predicted Hasbro would report sales of $675.9 million. Hasbro, the maker of Playskool preschool products and Littlest Pet Shop dolls, reported earnings of $4.8 million, or 3 cents, a year earlier.
Last year, the toymaker signed a license with Electronic Arts Inc. to make video, cell-phone and other digital games for brands such as Monopoly, Nerf and Scrabble.
“All toymakers are moving into digital entertainment”, said Los Angeles-based White. “Hasbro is a bit ahead of the curve.” He recommends holding the shares and doesn’t own any.
Brian Goldner, the former operating chief, took over as chief executive officer in May when Alfred Verrecchia, a 43- year Hasbro veteran, stepped down and became chairman.
Mattel, the maker of Barbie dolls and Hot Wheels cars, reported second-quarter profit on July 18 that fell less than analysts estimated on sales of Batman toys.
Net income declined 48 percent to $11.8 million, or 3 cents a share, as legal expenses rose. “The Dark Knight”, the newest Batman film, took in a record $155.3 million domestically over the weekend.
A day earlier, Mattel won a jury verdict against MGA Entertainment Inc. over the origin of the Bratz dolls.