Growth & Income: Hasbro (HAS)

Hasbro, Inc. (HAS) revenues have declined from 2009 because of last year’s strong sales from the Transformers: Revenge of the Fallen and GI Joe: The Rise of Cobra movies.

Despite the movie-related sales declines this year, Hasbro’s earnings actually increased 11.1% year-over-year. That was due to improving sales of games and puzzles like Magic the Gathering and Monopoly and strong cost controls, which boosted margins. The higher profit margins should bode well for the company’s results when revenue growth resumes.


Hasbro engages in the design, manufacture, and marketing of games and toys. The company principally provides children and family leisure time and entertainment products and services.

Growth and Income

The company is expected to grow its earnings per share 5.7% in 2010, 18.0% in 2011, and 10.0% over the long term. Hasbro’s trailing 12-month return on equity was 25.6%, and the stock also offers shareholders a dividend yield of 2.5%.

This Zacks #2 Rank stock trades at 15.3x 2010 consensus EPS estimates and 13.0x 2011 consensus EPS estimates.

Second-Quarter Results

On July 19, the company announced second-quarter net revenues of $737.8 million, down 7% from the year-ago quarter. The decrease was due to difficult comparisons because of initial movie product ship-ins from the Transformers: Revenge of the Fallen and GI Joe: The Rise of Cobra movies.

Hasbro earned $0.29 per share, topping the Zacks Consensus Estimate by 5 cents, or 20.8%. In the last five quarters, the company has beaten the Zacks Consensus Estimate by an average of 27.7%.

President, and CEO Brian Goldner said, “We are executing our long-term strategy by re-imagining, re-inventing and re-igniting our global brand.”


In the last week, the Zacks Consensus Estimate for 2010 is up 3 cents, or 1.1%, to $2.62. The Zacks Consensus Estimate for 2011 is up 3 cents, or 1.0%, to $3.09.

The Chart

HAS shares are up about 53% over the last year. The stock peaked in late June, but it has sold-off about 7% in the last month. The stock is sitting right at its 50-day moving average. Despite the recent sell-off, the uptrend appears to remain intact.

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