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Transformers toy tie-ins boost Hasbro's 2nd quarter revenue
PAWTUCKET, R.I. (AP) ' Talking cars aren't just big hits in movie theaters this summer, but in toy aisles as well.
Strong demand for merchandise from "Transformers" Dark of the Moon" helped boost Hasbro Inc.'s second quarter revenue up 23 percent, the toy maker said Monday. The news comes after Hasbro's chief rival Mattel Inc. said Friday that it's "Cars 2" toys were big sellers.
"As expected, top-line momentum in our business began to build during the quarter, led by strong gains in the Transformers brand, driven by the movie that was released June 29, said Hasbro CEO Brian Goldner.
He added that the movie has grossed $700 million globally so far, and has not yet opened in China and Japan. The brand has performed particularly well internationally, where the company has licensed everything from clothing to skateboards and bikes to video games.
Toys tied into movies tend to do well for toy makers since they benefit from movie studio promotion and sales to collectors. This summer has seen a bumper crop of movies that have strong tie ins. In addition to the Transformers movie, Hasbro has toys related to "Thor" which opened in May and "Captain America: The First Avenger," which opens Friday. Goldner said Captain America toys were "selling well" ahead of the opening.
In addition to sales of Transformers, other toys in Hasbro's boys division, such as Beyblade, a popular spinning top game, were strong. Sales of boys' toys rose 96 percent to $460.4 million. Girls' toys were weaker, down 11 percent to $119.1 million.
The Pawtucket, R.I.-based company's games division, which includes well-known games like Scrabble and Monopoly, also was weak. The division has experienced falling demand and a glut in supply. Revenue from games and puzzles fell 12 percent to $231.3 million, as the company discounted items to clear out excess inventory.
The company said Monday it is reorganizing the division, including cutting 96 jobs and relocating 59 others to Rhode Island from East Longmeadow, Mass. The reorganization will help the traditional games division and digital and online games work more closely together, Goldner said.
Overall, Hasbro's net income for the three months ending June 26 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. That fell short of analyst expectations of 39 cents per share, according to Fact Set. 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.
Despite that toy makers have been facing higher costs for resin, fuel and other raw materials, 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, helped by strong sales of "Cars 2" toys.
Hasbro shares fell 77 cents to $40.60 in morning trading.