Hasbro (NYSE: HAS) doesn't have a monopoly on the game market, but avoiding the pitfalls that rival Mattel (NYSE: MAT) had with lead-tainted toy recalls, the No. 2 game in town was able to post profits for the fourth quarter that beat analyst forecasts.

Revenue rose 16% to $1.3 billion, while earnings were up 24% to $133.7 million, or $0.84 a share. Analysts had predicted $0.81 in earnings on revenue of $1.22 billion.

Hasbro relied heavily on international sales, however. While domestic revenue rose 8% in the quarter, operating profits in North America fell 22% from the year before, even with the push they got from tie-ins to the Transformers movie. It was the 29% increase in international sales and 40% rise in profits that allowed the Motley Fool Stock Advisor recommendation to play as well as it did.

Despite the bad reputation from a seemingly never-ending series of recalls, Mattel said its domestic revenue fell only 3% in the fourth quarter. It reported an 18% jump in international sales, but half of that was as a result of favorable currency exchange rates.

Smaller rival JAKKS Pacific (Nasdaq: JAKK) reports in two weeks, but with its tie-in to Disney's (NYSE: DIS) incredibly popular 'tween star Hannah Montana, it might just fare a lot better. The Hannah Montana/Miley Cyrus Best of Both Worlds Concert Tour brought in about $29 million after showing on just 683 screens, making it the biggest debut ever over Super Bowl weekend. Moreover, the movie -- which Disney had planned to have run just one week -- was so popular, grossing an eye-popping $42,000 per theater, that Disney has decided to extend its run. JAKKS Pacific just might be the toy maker to watch.

RC2 (Nasdaq: RCRC), which makes the popular Thomas & Friends line of toys but also experienced recall troubles, is set to report earnings later this week, with analysts expecting a 36% drop in profits. Increased costs are weighing heavily on analysts' minds.

Costs might also weigh on Hasbro's performance in this new fiscal year. Cost of sales rose 21% last year, and it says price increases are on the way this year to offset price increases for raw materials. Margins suffered in the fourth quarter, and management wants to keep them from slipping further. Yet higher prices in a market where consumers are already showing restraint might not be the best endgame for Hasbro.

With a series of animated shows coming out based on the Transformers, Marvel's (NYSE: MVL) Spider-Man, and Star Wars later this year, along with a new Transformers movie and one with a personal childhood favorite, G.I. Joe, Hasbro might just be able to weather the recessionary headwinds blowing in retail's direction.

Hasbro is also toying with the buyback of shares, finished up its purchase of game maker Cranium, and just reported it will get a new CEO because Al Verrecchia will become chairman. As good as a lot of this sounds, it won't be all fun and games if the economy continues to worsen.

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