Toy makers weren't messing around this holiday season.
Sure, Hasbro's profit of $1.06 a share barely squeezed past Wall Street's target of $1.05 a share, but let's cut the Transformers and Monopoly maker some slack. Hasbro had actually missed analyst estimates in each of the three quarters before that. Baby steps are good if they're taken in the right direction.
Mattel and Hasbro are no slouches. They both even made investors happy by bumping their dividend rates higher last week.
However, investors looking for a little more growth out of their toy makers will want to pay attention to LeapFrog (NYSE: LF ) .
Anyone who's had a kid since the 1990s is probably somewhat familiar with the company. LeapFrog turned heads early with its electronic cartridge-based learning toys. Take a duster up to the attic. You may come down with a Leapster.
However, the company has had a rocky past few years. LeapFrog's been trading in the single digits since 2008. Executives have been shuffled about. Flops including the Didj gaming system and Fly "pentop" computer have held the maker of toddler gadgetry down.
LeapFrog caught a break last year when it introduced the LeapPad learning tablet. Purists will argue that it's not fair to call the learning toy a "tablet," but parents of young children couldn't get enough of the $100 device.
Consolidated net sales rose 11% to $210 million during the holiday quarter, fueled largely by a 32% surge in international orders. Earnings rose nearly 30% to $0.49 a share.
Once again, LeapFrog -- on the strength of the buzz-worthy LeapPad and the reliable performance of its older Leapster Explorer -- smoked Wall Street's bottom-line targets.
Source: Yahoo! Finance.
Whether it's posting narrower deficits than analysts are targeting during the first half of the year or blowing the pros away during the seasonally potent second half of the year, LeapFrog has landed ahead of the prognosticators by double-digit percentage margins over the past year.
LeapFrog's looking to build on its strong 2011 showing, eyeing a profit of $0.40 to $0.45 a share on a 6% to 8% pop on the top line. Analysts were perched on the lower end of that range before last night's report. Those same market watchers see Hasbro and Mattel growing substantially slower.
LeapFrog's shares have already tacked on healthy gains since LeapPad began to take off late last year, but it's still cheap at 14 to 16 times this year's bottom-line outlook.
I put in a bullish call on LeapFrog in Motley Fool CAPS back in October, and it has soared 80% in that time. In the spirit of our CAPScall push for accountability, I'm going to stick to that position. If you want to get in early on the next mobile investing craze -- beyond LeapFrog's pseudo tablet -- warm up to a special free report on the next trillion-dollar revolution.