Shares of popular toymaker Hasbro Inc. (NYSE: HAS) have been climbing in early trading after the company posted this morning a better-than-expected fourth-quarter profit. For the quarter, the world's second-largest toymaker reported that its profit jumped 24% up to $133.7 million, lifted by strong sales of its Transformers, Nerf and Furreal Friends product lines. Strong revenue gains offset weaker gross margins and lower U.S. earnings, and the company posted earnings of 84 cents per share. Analysts were expecting Hasbro show earnings of 81 cents per share in the quarter.
Amid a challenging consumer environment, Hasbro announced a respectable jump of 16% in revenue to $1.3 billion, up from $1.1 billion a year earlier. Revenue during the period were helped by a 29% surge in its international sales that outpaced those in North America. Analysts, on average, forecast sales of about $1.22 billion, according to Reuters Estimates.
Hasbro's strong earnings figures were boosted by higher sales of both its Littlest Pet Shop animals and Transformers, Spider-Man products. Overseas sales rose to $489.2 million due to the dollar's decline against international currencies, while North American sales saw a gain of 7.6% to $766.8 million.
The toy maker also managed to avoid bad publicity and costs effects of toys recalled for excessive lead paint that hurt many of its competitors, such as Mattel Inc. (NYSE: MAT). Despite posting stronger-than-expected fourth-quarter earnings two weeks ago, Mattel had to face negative publicity related to the recall of millions of its toys due to safety and lead paint concerns. Fortunately for Mattel, higher international sales helped the company offset $42 million in costs for toy recalls.
Despite losing some ground during the second half of last year, Hasbro said its full-year net income climbed to $330 million, or $1.97 a share, up from $230.1 million, or $1.29 a share, a year ago. Full year sales also jumped to $3.84 billion from $3.15 billion a year earlier.
So far investors are enjoying the company's better-than-expected earnings as its shares are up 2.93% to $26.66. Though the stock was weak during the last few quarters of 2007, shares have been able to rebound since the beginning of this year and I expect to see further gains based on its positive quarterly numbers.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
Comfort Zone Investing: The unmighty dollar
Five winners of a weak dollar
For a quick-read on the U.S. economy, check the price of gasoline
