Children and investors, rejoice! It's a little late for Christmas, but toymaker and Motley Fool Stock Advisor pick Hasbro (NYSE:HAS) is finally arriving early tomorrow morning, bearing a Q4 and full-year 2005 earnings statement full of . something. Will it be toys to reward, or coal with which to punish, investors' patience? Only the morrow will tell. But here at the Fool, we're an impatient lot. Let's take a peek inside Hasbro's bag and see what it might contain.

Wall Street Wisdom:

  • General consensus. Ten analysts follow this company, with six rating it a hold, three a buy, and one a sell.
  • Revenues. Sales are believed to have risen just 5% year over year in Q4, to $1.11 billion.
  • Earnings. Analysts are expecting profits growth to outpace that number and rise 7% to $0.58 per share.

Margin watch:
This firm's margin trends are about as exciting as its earnings growth. The gross has slipped a bit over the past 18 months, but not really enough to worry about. Operating margins are another matter, sliding 210 basis points on average over the period reviewed. The good news, of course, is that they've held pretty steady for the past nine months. Hasbro has also done a good job of keeping its net margins rigid.

Margins %

6/04

9/04

12/04

3/05

6/05

9/05

Gross

51.7

51.8

50.8

50.9

50.7

50.6

Op.

11.5

11.1

9.8

9.4

9.4

9.4

Net

5.5

6.2

6.5

6.2

6.5

6.5

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ending in the named months.

Taking inventory:
There aren't many things you can do that will earn less money than trying to sell last year's hot toy today. Inventory growth is always going to be a concern with toymakers. Fortunately, it's not a concern at Hasbro. Over the past two quarters, the company's inventories have grown almost in lockstep with sales growth -- no danger signs there.

A corollary to the inventory concern is accounts receivable. When a company like Hasbro fails to collect on its bills promptly, that can spell trouble down the road. This was a (slight) concern two quarters back, when Hasbro allowed A/R to rise 13% year over year in response to just an 11% rise in sales. But the company got itself back on track last quarter, when A/R actually declined despite a 4% rise in sales. Tomorrow, let's look for similarly excellent inventory and A/R management in the quarter just ended.

Hasbro is a Stock Advisor pick. Try a 30-day free subscription and gain access to all of David and Tom Gardner's picks.

Fool contributor Rich Smith does not own shares of Hasbro.