Hasbro Investors Get a Real “Pay Day”

Jacob Harper  |

On October 20 board game and toymaker Hasbro ($HAS) delighted investors with an earnings report that met revenue projections and slightly bested earnings expectations.

Hasbro’s good fortunes can likely be traced to a “Risk” the company took in expanding into emerging markets, one that has paid off handsomely. In their earnings report Hasbro cited a whopping 29 percent increase in the developing markets sector.

Another bright spot for Hasbro was their “Franchise Brands,” or the seven flagships that make up their core products, namely Little Pet Shop; Magic: The Gathering; Monopoly; My Little Pony; Nerf; Play-Doh; and Transformers. The latter property has been especially lucrative; a “Clue” that Hasbro would have a good third quarter became evident when the film Transformers: Age of Extinction raked in $1.08 billion in box office over the summer. The performance of Guardians of the Galaxy, of which Hasbro is also entitled a percentage, also contributed to the successful quarter.

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Hasbro is also known for manufacturing classic games like “Battleship,” “Ouija,” “Candyland”, and “Trivial Pursuit” among countless others, has a near “Monopoly” on the board games industry. And while children’s entertainment has certainly moved to more high-tech fare the last 30 years and Hasbro has at times struggled to maintain a profitable “Operation,” they still retain the capability for surprising the market on the backs of their continually popular children’s lines.

Utilizing the gender divisions by which Hasbro self-defines their own product lines, whether board games, movies, toys, Hasbro’s success this quarter was contributable to males. "Boys, fueled by Transformers and Marvel products, was the key driver in the quarter," MKM Partners analyst Eric Handler said.

In the earnings report, Hasbro reported earnings of $180.46 billion, or $1.46 a share, compared with $126.57 billion, or $0.96 a share, the year prior. Revenues were $1.47 billion, compared to $1.37 billion the year prior. Analysts had been expecting profits of $1.45 a share on revenues of $1.47 billion.

Shares of Hasbro edged up 5.57 percent to hit $56.85 a share. This upward movement took the company’s stock back into the black for only the second time all year.

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