"All is well here in New England," said CEO Al Verrecchia of Rhode Island-based Hasbro (NASDAQ:HAS) in kicking off this morning's conference call. "The Red Sox are in the World Series, the Patriots are 7-0, and Hasbro has another strong quarter."

Verrecchia should feel upbeat, regardless of the on-field achievements of the Boston area's sports teams. Hasbro scored a profit of $0.78 a share in its latest quarter before favorable charges. That was well ahead of the $0.58 per share it earned a year ago and the $0.71 a share that the pros were expecting. Net revenues climbed 18% higher to $1.2 billion, also topping Wall Street targets.

Toymakers have been a challenging investment lately. Mattel (NYSE:MAT) and RC2 (NASDAQ:RCRC) shareholders have been burned by toy recalls. Losses continue at LeapFrog (NYSE:LF), with annual profitability still two years away.

These events are opening up the door for rival toymakers including Hasbro and JAKKS Pacific (NASDAQ:JAKK), which are doing just fine avoiding those minefields -- and perhaps even benefiting from consumer apprehension when it comes to tainted brands.

Verrecchia began by addressing concerns about the company's five-year licensing deal with Marvel (NYSE:MVL). He insists that the initial performance is exceeding expectations and resulting in "meaningful profitability" in what should make up to 8% to 10% of Hasbro's overall worldwide sales.

Hasbro is also doing well with its Transformers toy line. Riding on the success of Viacom's (NYSE:VIA) theatrical blockbuster, Hasbro's robotic playthings are selling briskly. It certainly doesn't hurt that Hasbro is also getting a piece of the box-office action.

This doesn't mean that Hasbro's other toy lines will become major third-party franchises. For example, don't look for any of the following:

  • Candy Land as a chain of confectionary shops.
  • Operation as a prime-time medical drama.
  • A pro sports league based around Nerf products.

However, with Hasbro's brand still golden, who am I to assume that the party ends with Transformers on the big screen? The company has now obliterated profit targets in four of the past five quarters. And there is little reason to believe that demand will dry up for the company's collection of board games, toys, and licensed merchandise.

All is well in New England, indeed.

Hasbro and Marvel are recommendations for Motley Fool Stock Advisor subscribers. Mattel made the cut for  Inside Value readers. Free 30-day trials are available for both newsletter services.

Longtime Fool contributor Rick Munarriz wonders who will have the hot toys for the 2007 holiday season. He does not own shares in any of the companies in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, batteries included.