Hasbro Strong in a Difficult Market

Hasbro, Inc. (HAS) is distinguishing itself from its retail brethren during a time when consumer spending habits have been effected by a litany of economic issues. Hasbro reported solid first-quarter results in late April, analyst continue to upgrade their earnings projections and the company's stock price has been in rally mode for most of the year.

Hasbro, Inc. designs, manufactures and sells games and toys. The company was founded in 1923, carries a market cap of $5.37 billion and is headquartered in Pawtucket, Rhode Island.

Solid First-Quarter Results

Hasbro shares have been bucking the market trend in 2008, with its share price logging steady gains and advancing from just above $21 to its current price just under $40. Much of the strength has been built on the company's strong first-quarter results, reported on April 21.

Revenue was up 13% from the same quarter last year to $704.2 million. Net income was also up 13% from last year, increasing to $37.5 million. This produced earnings of 25 cents per share, well ahead of analyst estimates of 15 cents per share.

Strong International Growth

Hasbro noted that it experienced particularly strong growth from its European segment, with sales up 22% from last year to $248.3 million. 12% of these gains came from favorable currency exchanges.

Hasbro has made a habit out of surprising and beating analyst estimates, having done so by an average of 7 cents, or 31% over the last four quarters.

The company also noted that during the quarter it repurchased 6.1 million shares of its common stock for $156 million.

Sustaining Guidance In A Tough Market

After the solid quarter, Hasbro re-affirmed that it remains on target to hit its full-year financial goals. This warrants particular importance because many companies operating in the retail discretionary industry have lowered their earnings projections due to the weakened consumer environment.

Alfred J. Verrecchia, President and Chief Executive Officer said, "While it's early in the year and there is still a lot of business to be done, our first quarter performance reinforces the confidence we have in achieving our full-year financial goals."

Estimates Are Up

Analysts continue to revise their estimates upward, with the current-year estimate tacking on 17 cents in the last 60 days and advancing to its current projection of $2.16 per share.

The Chart

As previously mentioned, Hasbro shares have had a great year, bottoming out at less than $22 in mid January and advancing to their current price just a pinch below $40. Recently, shares have been bucking up against a formidable level of resistance just below $40, which is also the 52-week and all-time high. Pressure does appear to be building beneath this level, as it has been tested a number of times over the last two weeks. Take a look at the chart below.