Let's not toy around. The earnings at Hasbro (NYSE:HAS) were as soft as a Nerf ball.

Analysts, expecting income of $0.04 a share, were treated to a loss of $0.02. Revenue also fell short, declining 4% -- and that's below the lowest analyst estimate. Everyone must be wondering where the action heroes were when Hasbro needed them.

This quarter's performance follows a holiday season when sales fell 5.6% but earnings rose 7.3%. At least Santa found a way to leave a present under the shareholders' trees.

While this is not the merry season in Toyland, toy manufacturers' stocks have been beaten up for years. Look at this one-decade chart of Hasbro. Ouch! Competitor Mattel (NYSE:MAT) doesn't look better, nor does the previously hot new kid on the block, LeapFrog (NYSE:LF).

This comment from today's press release makes sense: "While our first quarter performance was mixed, overall, results were in line with our expectations as our business continues to be more weighted to the back half of the year." It's hard to find a toy company whose results are not weighted toward summer and the holiday season.

That said, let's take a look into the company's prospects for the foreseeable future. News Corp. (NYSE:NWS) will release the latest episode of Star Wars next month. To no one's surprise, Hasbro is already shipping Star Wars toys.

For the longer term, Hasbro has signed on Viacom's (NYSE:VIA) cast of popular Nickelodeon characters, is resurrecting Furby, and is looking to Saturday Night Live to add some punch to "Trivial Pursuit" sales (the company has been faced with declining sales in its traditional board games segment). Add in the company's cost-cutting moves, so the Wal-Marts (NYSE:WMT) and Targets (NYSE:TGT) of the world can have great prices (while allowing the company to retain decent margins), and you have the potent one-two punch of product and pricing to (hopefully) get this business out of its lethargy.

I'd say there's a decent chance that the market is underestimating what's ahead, provided consumer spending numbers are not stymied by the prospect of continuing high oil prices and higher-than-expected inflation.

Two Motley Fool newsletters see lots to play with here. The Motley Fool Stock Advisor is recommending Hasbro, and the people at Inside Value like Mattel. The stocks of both toy manufacturers have declined over the past 52 weeks but appear ready to roll on to more robust times, provided the economy is agreeable.

Fool contributor W.D. Crotty owns shares of News Corp. Click here to see The Motley Fool's disclosure policy .