Is Hasbro Toying With You? (HAS)

Is Hasbro Toying With You?

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Toymaker Hasbro (Nasdaq: HAS ) recently reported numbers that failed to impress investors for the second consecutive quarter. The stock price of this company has been declining over the past year. Let's plumb the depths to see what's working for the company and what's not.

A numbers game...
Hasbro's revenue was up more than 5% to $1.38 billion compared to the previous year's quarter. The company's net earnings rose by 10% to $171 million. However, its earnings per share of $1.27 just did not please the market, which expected $1.30 per share. Missing expectations for the second time, especially when competitor Mattel (Nasdaq: MAT ) posted profits in line with expectations, is the sort of thing that tends to worry Mr. Market.

Weakness lay in the home market. Amid economic uncertainties, global slowdown, and unemployment, consumer confidence has dipped. Hasbro suffered a 7% decline in sales in the U.S. and Canada, regions which account for more than half of the company's revenue. Smaller toy company JAKKS Pacific (Nasdaq: JAKK ) also complained of low demand, and saw net income fall 14% in the last quarter.

A sign of relief for Hasbro was its international sales, which reported a sharp 23% rise compared to the year-ago quarter. The company benefited from better worldwide performance of the boys and infant segments.

Has the ship sailed yet?
Analyst Margaret Whitfield believes that shipping timings may be be responsible for the company's poor performance, and that shipping in October may help them turn the corner for next quarter. I agree; however, the company missing Street estimates for two consecutive quarters is worth keeping an eye on.

The good news for the company is that the holiday season is around the corner. This season can help the company earn about 40% of its annual revenue. This is the time of the year when Hasbro needs to perform well and make up for two recent weak quarters.

The Foolish bottom line
Hasbro is gearing up for the holiday season, but with overall economic conditions being what they are, it's too early for me to play around with this company. If you want to see how well Hasbro performs this holiday season, and whether it can beat analyst expectations going forward, be sure to add it to your watchlist.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

Navjot Kaur does not own shares in any of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Hasbro and Mattel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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