Hasbro Misses on Rev, EPS In Line - Analyst Blog
06 Fevereiro 2012 - 10:00AM
Zacks
Hasbro Inc. (HAS)
has reported fourth quarter 2011 earnings per share of $1.06, which
was in line with the Zacks Consensus Estimate of $1.06 but higher
than 99 cents earned in the year-earlier quarter. In full-fiscal
2011, earnings were $2.82 per share versus $2.74 in 2010.
Hasbro’s net revenue of $1,329.3
million grew 4.0% from the year-ago quarter but lagged the Zacks
Consensus Estimate of $1,336.0 million. Foreign exchange had an
unfavorable impact of $13.3 million. Continuous outperformance by
the Transformers and Beyblade brand along with the introduction of
Sesame Street aided the revenue upside. Sustained double-digit
growth in the International segment was the other factor to be
thanked for the revenue growth. In full-fiscal 2011, revenue was
$4.29 billion, up 7% year over year.
Hasbro continued to return value to
investors in the form of a share repurchase and dividend
distribution.
Performance
Highlights
Hasbro experienced worldwide net
revenue growth in two of its four major product categories, namely
Boys and preschool which shot up a respective 29% and 15% to $536.3
and $169.8 million, on an annualized basis. On the other hand,
Girls and Games categories fell 16% to $250.0 million and 11% to
$370.6 million, respectively.
Geographically, net revenue from
the U.S. and Canada segment declined 2% year over year to $592.8
million, while its operating profit registered a steeper decline of
28% to $50.8 million. Soft retail business during the crucial
holiday was mainly responsible for this lackluster performance. The
International segment reported net revenue of $669.8 million, up 8%
year over year. The segment’s operating profit was $137.8 million,
6% higher than the year-ago quarter.
The Entertainment and Licensing
segment also experienced a 20% year-over-year jump in revenue to
$64.1 million. But the segment’s operating profit showed a greater
increment of 44% to reach $21.5 million.
We noticed a 32.1% rise in Hasbro’s
royalty expenses from the prior-year period to $104.5 million.
Product development expenses totaled $47.4 million, down 23.4% year
over year. Advertising expenses decreased 5.9% from the prior-year
quarter to $135.2 million. Selling, distribution and administration
expenses also decreased 11.4% to $202.2 million.
Financials
At quarter end, total assets were
$4.13 billion compared with $4.10 billion at the end of the
year-earlier quarter. Hasbro’s long-term debt was $1.40 billion,
almost flat year over year.
Hasbro repurchased a total of 1
million shares of common stock during the quarter at a total cost
of $423.0 million. At year-end, $227.3 million remained available
in the current share repurchase authorization.
Since 2005, Hasbro repurchased $2.6
billion worth of common stock. Recently, Hasbro hiked its quarterly
dividend from 9 cents to 36 cents per share.
Outlook
Management expects year-over-year
growth in revenue and earnings per share for 2012.
Our Take
Hasbro’s strong product line-up,
strategic tie-ups, cost containment effort and its growing presence
in emerging geographical regions bode well for future growth.
However, the consensus miss for
fourth-quarter revenue concern us a bit. Moreover, charges relating
to restructuring and investment in licensing remain overhangs.
Hasbro currently retains a Zacks #3
Rank, which translates into a short-term Hold rating. We are
maintaining our long-term Neutral recommendation on the stock. Last
week, one of Hasbro’s closest competitors Mattel
Inc. (MAT) reported fourth quarter earnings of $1.07 per
share, which was ahead of the Zacks Consensus Estimate.
HASBRO INC (HAS): Free Stock Analysis Report
MATTEL INC (MAT): Free Stock Analysis Report
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