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Hasbro net income rises in 2nd quarter, helped by higher revenue, tax adjustment
PAWTUCKET, R.I. (AP) ' Consumer demand for Transformers action figures as well as the Beyblade spin-top game helped push Hasbro Inc.'s second quarter profit up 33 percent, the company said Monday.
But adjusted net income was weaker than expected as the toy maker reorganized its games division and invested in its television joint venture with Discovery Communications. It also bumped up spending on an international expansion.
"We have continued to make important investments in our business which will help drive both top and bottom line growth in the future," said CEO Brian Goldner.
Its shares slipped 25 cents to $41.12 in premarket trading.
The maker of Nerf toys and board games like Monopoly said its net income rose to $58.1 million, or 42 cents per share, from $43.6 million, or 29 cents per share, a year ago.
Excluding a tax adjustment and costs for reorganizing its games department, however, earnings were 33 cents per share.
Analysts expected adjusted earnings of 39 cents per share. Analyst estimates typically exclude one-time items.
Revenue rose 23 percent to $908.5 million from $737.8 million. That beat Wall Street expectations of $848.8 million.
International revenue jumped 43 percent to $374.5 million while U.S. and Canada revenue rose 14 percent to $505 million.
Sales of boys' toys rose 96 percent to $460.4 million. Girls' toys were weaker, down 11 percent to $119.1 million.
Revenue from games and puzzles, which has been a weak spot for Hasbro, fell 12 percent to $231.3 million. The company said it is reorganizing its global games business and moving some of its games marketing and development employees from East Longmeadow, Mass., to Rhode Island. That move cost the company $13.1 million in the second quarter and will cost $7 million over the next three to four quarters.
Toy makers have been facing higher costs for resin, fuel and other raw materials.
Still, Hasbro said it expects "meaningful growth" in net income and revenue for the full year. Toy makers make the bulk of their revenue during the second half of the year, which includes the crucial holiday period.
In the current third-quarter, Hasbro is launching its new Kre-O construction brand, preschool Sesame Street toys and other new toys.
Hasbro's larger rival Mattel Inc. reported on Friday its second-quarter net income jumped 56 percent while revenue rose 14 percent to $1.16 billion.