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Hasbro sees 11% gain in profit in 3Q

Boys toys, licensing make money

-- Kids Today, 10/21/2009 8:43:00 AM

PAWTUCKET, R.I.—Hasbro reported an 11% gain in profit during the third quarter, helped by its boys toy business and by licensing revenue.

Net earnings for the quarter were $150.4 million, or $0.99 per diluted share, up from $138.2 million or $0.89 per diluted share, in the corresponding period of 2008.

The 2009 third quarter results include a $0.03 per share dilutive impact from the company’s investment in its joint venture with Discovery Communications and initial investments in Hasbro’s virtual studio. The company anticipates dilution of $0.04 to $0.05 per diluted share in the fourth quarter due to the investment in the joint venture with Discovery Communications and Hasbro’s virtual studio. In 2010, the expected dilution is $0.25 to $0.30 per diluted share.

Operating profit for the quarter rose to $230.7 million, or 18% of net revenue, compared to $215.9 million or 17% of net revenue last year.

Third quarter 2009 net revenue was $1.28 billion, compared to $1.30 billion a year ago, a decrease of 2%. Excluding the negative million impact of foreign exchange, the toymaker’s net revenue rose 1%.

“Hasbro performed well in what is continuing to be a challenging global environment. We grew revenues absent the impact of foreign exchange and we grew earnings and earnings per share including the dilution from the investments we are making in our joint venture with Discovery Communications and Hasbro’s virtual studio,” said Brian Goldner, president and CEO.

The company’s U.S. and Canada segment saw net revenue slip 3.5% to $791.9 million, as declines in the girls, preschool and the games and puzzles categories overtook what Hasbro said was a “strong” performance by its boys business. Overall, the U.S. and Canada segment reported an operating profit of $129.1 million, compared to $131.9 million in 2008.

International segment net revenues were $444.1 million, compared to $460.6 million in 2008. Revenues grew 4%, absent a negative foreign exchange impact of $34.3 million. The results reflect growth in boys and preschool categories, offset by declines in the girls and the games and puzzles category. The International segment reported an operating profit of $64.1 million compared to operating profit of $65.8 million in 2008.

Entertainment and Licensing segment net revenues were $41.6 million, compared to $18.3 million in 2008. The results primarily reflect increases in Transformers and G.I. Joe. The Entertainment and Licensing segment reported an operating profit of $19.8 million compared to operating profit of $6.3 million in 2008. The Entertainment and Licensing segment includes television, movies, lifestyle and digital licensing and on-line entertainment operations.

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