Earnings rise at Hasbro

Oct. 21, 2002 at 10:54 AM
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PAWTUCKET, R.I., Oct. 21 (UPI) -- Hasbro Inc., the world's second-largest toymaker, posted a higher third-quarter net income as cost-cutting measures offset a drop in sales of products including trading card games and robotic pets.

Hasbro, which makes Mr. Potato Head, GI Joe action figures and the Easy-Bake oven, said its third-quarter net income rose to $55.8 million, or 32 cents a share, from $50.6 million, or 29 cents a share during the same period last year.

Analysts on Wall Street had expected the company to report a net income of 37 cents a share, according to Thomson First Call.

Net revenues declined 8 percent to $820.5 million from $893.4 million a year ago.

Alan G. Hassenfeld, chairman and chief executive officer, said, "We are encouraged by our accomplishments this quarter. We remained focused on improving profitability for shareholders, managing our bottom line effectively despite a revenue decline. In examining our revenue results more closely, non-core products such as licensed trading card games and robotic pets were the primary reason for the top line decrease this quarter.

"In looking at our core brands, G.I. Joe sales were up 82 percent and Transformers were up 65 percent. In addition, Playskool was up 49 percent year-over-year, with Mr. Potato Head experiencing 39-percent revenue growth for the quarter," he said.

"In Games, the initial response to The Special 20th Anniversary Edition of Trivial Pursuit and the Scrabble Folio has been very strong. I believe our success with these core brand extensions underlines the depth and strength of Hasbro's product portfolio," Hassenfeld said.

The company said in the U.S. Toys segment, revenues were down for the quarter, primarily due to robotic toy products related to the Tiger and WowWee lines.

Partly offsetting this impact, the company said it experienced strength in a number of core product lines including G.I. Joe, Transformers, Playskool and Easy Bake.

International segment revenues were down, primarily due to Pokemon and Harry Potter trading card games, offset in part by strong revenues from many core brands including Transformers, Play-Doh, Micro-Machines and Magic the Gathering trading card games.

The company said all three of its business segments were profitable for the quarter on a pre-tax basis, with both the U. S. Toys and Games segments delivering an increase in year-over-year profitability.

Alfred J. Verrecchia, president and chief operating officer, said, "Our strategy of focusing on cost reductions, managing the balance sheet and growing our core brands is continuing to generate results. We continue to make significant progress on both our financial and non-financial goals."

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