Posted on: Sunday, February 15, 2004

Hasbro earnings soar 23 percent in fourth quarter

Advertiser News Services

Two toy manufacturers reported mixed earnings in the fourth quarter.

Hasbro Inc., the nation's second-largest toy maker behind Mattel Inc., said its earnings rose 23 percent in the fourth quarter through strong sales of new products, classic board games and core brands.

The Pawtucket, R.I.-based firm said it earned $76.6 million, or 43 cents per share for the three months ended Dec. 28. That compared with $62.16 million, or 36 cents per share, a year earlier.

The earnings results included charges of $18.4 million related to severance payments stemming from the cessation of toy manufacturing operations at its Valencia, Spain, facility and $14 million related to exiting leases and severances for employees of the remaining Wizards of the Coast retail stores. The company also had a $20.3 million charge related to the December bond tender offer, primarily comprised of the premium paid to bondholders that participated in the tender offer.

Excluding the charges, Hasbro said it earned 65 cents per share, 10 cents above the forecast of analysts surveyed by Thomson First Call. The company also said it took on a charge of less than $1 million when KB Toys announced it would seek bankruptcy protection last month.

Revenues in the fourth quarter were $1.12 billion, up 12 percent from $997.4 million in the year-ago period.

LeapFrog Enterprises Inc. reported fourth-quarter earnings of 72 cents a share, compared with the prior year's 50 cents a share.

But earnings were a penny short of the 73 cents a share that was forecast, on average, in a Thomson First Call survey of analysts.

Much of that shortfall was attributed to the higher shipping costs for the late launch of the company's Leapster multimedia learning system.

Credit Suisse First Boston analyst Brandon Dobell noted the company's gross margin fell 340 basis points from a year ago, and operating margin growth failed to meet his expectations.