Earnings Preview: Hasbro

Hasbro (HAS) is expected to report Q2 earnings before market open on Monday, July 21, with a conference call scheduled for 8:30 am ET.

Guidance

Analysts are looking for a profit of 22c on revenue of $675.4M. The consensus range is 13c to 27c for EPS, and revenue of $600M to $700M, according to First Call.

Analyst Views

A Wedbush Morgan analyst expects the toy maker to report results in line with consensus estimates. Channel checks have indicated that while cost pressures remain troublesome for all toy manufacturers, Hasbro has "long communicated" that these costs are manageable, the analyst said, adding that Hasbro has been "rather sanguine about the effects commodity and labor cost inflation are having on its margins." The analyst believes the company's sales remain strong, but high input costs could drag margins down eventually.

A Zacks analyst also believes Hasbro is well-positioned, given its strong financial position. Given the company's strong product line-up and lucrative product associations with popular motion pictures, the analyst said that that Hasbro should continue to trade at a premium to the peer group and to its primary competitor, Mattel (MAT). The analyst projects "only moderate earnings growth" in 2009 due to further deterioration in the economy that could lead consumers to cut back on non-essential purchases.

Comments

[MD]

Love Hasbro. The new strategy is golden - milk every last cent out of their long established properties. Next year they have Transformers 2 and GI Joe movies, plus they should profit in 2Q from Iron Man and Hulk. In Q3 they have the Star Wars animated flick to drive toy sales. Their new TF cartoon toys have been flying off the shelves, and I've noticed these toys are about 10% more expensive then a year ago.

Steve
magicdiligence.com