Toy and infant products maker RC2 Corp. said Tuesday its first-quarter earnings fell 10 percent but still beat analyst estimates, sending shares up 23 percent in aftermarket electronic trading.
The Oak Brook, Ill.-based company posted net income of $1.8 million, or 10 cents a share, for the period ending March 31. That was down from earnings of $2 million, or 11 cents a share, in the same period last year.
Excluding one-time costs for recall-related items, RC2 earned 11 cents a share in the quarter _ far above the 2-cent loss that analysts polled by Thomson Reuters had predicted. They typically do not include one-time items in their estimates.
Revenue fell nearly 8 percent to $86.3 million from $93.3 million in the same period last year, but also still beat Wall Street's $82.2 million estimate.
Shares jumped 58 cents, or 10 percent, to close earlier at $6.40, and surged $1.45, or 23 percent, to $7.85 after hours.
The company said foreign currency fluctuations hurt sales by about 6 percent in the quarter, and retailers were conservative with their orders. Net sales of products for mothers, infants and toddlers edged up 2 percent from the same period last year, but sales of preschool, youth and adult products fell 17 percent. Excluding products in the latter segment that were discontinued from last year, sales fell 15 percent in the category.
Chief Executive Curt Stoelting said foreign currency fluctuations are hurting business. He said international sales in the quarter grew 19 percent but because of foreign exchange rates, international sales fell 9 percent in the quarter translated into U.S. dollars. As the U.S. dollar gains strength, that hurts companies that do business overseas.
Stoelting said the company continues to expect a difficult 2009 but it sees product costs and currency trends improving in the second half of the year.
The company maintained its guidance for earnings per share of $1.35 for fiscal 2009, above analysts' average forecast of $1.28 per share.
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