Hasbro, Maker of Monopoly and Transformers, Misses Q1 Earnings

It was revealed on Monday that toy maker Hasbro

has not had the best of first quarters, reporting a loss on lower revenue and heavy severance costs. That saw the country's number two toy company behind Mattel

miss Wall Street Estimates. HAS, which makes such popular brands as Monopoly and Transformers, announced on Monday that it lost $2.6 million, or 2 cents per share, for the period ending April 1. Compare that to the previous year, when Hasbro reported income of $17.2 million, or 12 cents per share. The first quarter of the year is notoriously difficult for the toy companies. They would all expect to see a drop following the fourth quarter that includes the holiday period. Still, the fact that things have gone downhill so dramatically compared to the same time in 2011 will be cause for concern. Excluding six cents per share in those severance costs, which have inevitably had an impact, earnings were four cents per share. Analysts were expecting eight cents per share. As for the revenue, that fell 3% to $648.9 million, and was hurt by unfavorable foreign exchange rates. Analysts were expecting revenue of $667.6 million. On Monday, Citi published a research report stating that the company mentioned good momentum in their int'l business and positive POS trends in the U.S. and int'l markets. HAS mentioned 1Q12 results are consistent w/ their expectations and results should be more 2H loaded as results would more closely align w/ consumer demand. While Hasbro missed street numbers in 1Q, this quarter was a very small quarter for the year. The key to whether Hasbro continues to miss numbers and sees negative growth in 2012 will be spring/summer Movie related properties (particularly Spiderman) and Holiday (4Q). For perspective, on April 11 Sterne Agee said that the boys business faces a very difficult comparison, as revenues increased 25% in 1Q11 on the strength of Beyblades and Transformers last year, and new entertainment lines may not match up to last year's success with Transformers. While the European opening of Battleship is scheduled to start on April 11-12th, the U.S. opening is set for May 18th. Other opening dates in the U.S. are Avengers (5/4) and G.I.Joe (6/29), with Spiderman on 7/3 likely the most promising toy line. Demand for Beyblades seems to still be solid, but the company is facing a very difficult comparison to 2011, which was the first full year following the brand's reintroduction, and expectations have been for a significant y/y decline. Follow me

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