Shares of toy maker Jakks Pacific Inc. fell on Wednesday, after it reported second-quarter earnings fell below expectations and lowered its fiscal 2008 earnings guidance.
The Malibu, Calif., company said profit fell 17 percent, as higher raw material costs offset higher sales. The company blamed higher costs for raw materials, transportation, product testing and litigation for the reduced guidance.
It now expects a profit of $2.80 per share, while analysts polled by Thomson Financial, on average, predict a profit of $2.91 per share.
Stifel Nicolaus & Co. analyst Drew Crum said in a note to investors Monday that the quarter is seasonally less important than others.
Revenue, which rose 12 percent to $145.3 million, ahead of expectations, was "consistent with what we've observed from other toy companies during this earnings cycle," Crum wrote.
Crum added that his "Buy" rating and $31 target price are under review.
Shares fell $2.31, or 9.7 percent, to $21.63 Wednesday. The stock has traded between $18.19 and $30.55 during the past year.
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