Strong overseas demand boosts Hasbro's results
By Dhanya Skariachan (Reuters) - Hasbro Inc , whose popular toy brands include Monopoly, Nerf and My Little Pony, topped Wall Street's profit estimates in the third quarter as strong overseas demand and cost controls helped overshadow weakness at home. The news on Monday boosted the second-largest U.S. toy company's shares by 2.7 percent to $48.50 in premarket trading. Both Hasbro and larger rival Mattel Inc , which also beat analysts' expectations for the quarter, are gearing up for the holiday season, the biggest selling period of the year. Hasbro should benefit from Transformers and Spider-Man movies in 2014 and from Star Wars and Avengers in 2015, analysts said. Mattel has "good prospects, but it doesn't have as clearly visible a catalyst for sustained revenue growth as Hasbro has," said Needham & Co analyst Sean McGowan. Hasbro continues to operate in "a challenging economic environment in many developed economies," Chief Executive Officer Brian Goldner said during a conference call. He added that the company's Big Hugs Elmo toy, which came out earlier this year, was "off to a strong start." Like Mattel, Hasbro was able to use strength in sales outside of North America to offset weakness in the United States and Canada. Goldner credited a 22 percent rise in sales in emerging markets such as Latin America and the Asia Pacific for boosting its quarterly results. Revenue rose 11 percent to $582.7 million at Hasbro's international unit, but fell 5 percent to $735.6 million in the United States and Canada. Net earnings rose to $193.0 million, or $1.46 a share, from $164.9 million, or $1.24 a share, a year earlier. Excluding a tax adjustment and restructuring and pension charges, the company earned $1.31 a share, above the analysts' average estimate of $1.29, according to Thomson Reuters I/B/E/S. Sales rose 2 percent to $1.37 billion, beating analysts' expectations of $1.34 billion. Strength in the girls and game businesses helped Hasbro offset weakness in the boys and preschool units. Hasbro, which is in the middle of a restructuring program, cut its cost of sales by 3.1 percent in the quarter. (Reporting by Dhanya Skariachan in New York; Additional reporting by Jessica Wohl in Chicago; Editing by Lisa Von Ahn)
