Hasbro Passes Go, Collects $32.9 million

There may still be hope for Generation X-Box. Perhaps every kid isn't trading in his or her baseball bat or baby doll for cell phones and PSPs after all. If earnings on Wall Street are an indicator, good old-fashioned child's play is back on the rise.

On Monday, Hasbro issued first quarter results that wowed shareholders and sent the company's stock soaring $2.59 to $32.80 in afternoon trading. Revenue for the nation's second largest toymaker climbed 34 percent to $625.3 million from $468.2 million a year before.

Net income was $32.9 million, compared with a net loss of $4.9 million a year-earlier. According to Thomson Financial, consensus analyst estimates were for break-even results on revenue of $508 million.

Add to the earnings surprise the results posted last week by Mattel. The largest U.S. toymaker reported an unexpected profit for the first-quarter and a 19 percent sales jump.

Why the sudden windfall? Toymakers don't usually experience profit swings this dramatic, particularly outside of fourth quarter holiday sales rush.

Hasbro's blockbuster sales in the first three months of 2007 can be partly attributed to a licensing deal signed with Marvel last year, allowing Hasbro to produce toys based on the company's more than 5,000 characters.

Demand created by merchandising for upcoming summer blockbuster movies "Spiderman 3," "Fantastic Four: Rise of Silver Surfer," and "Transformers: The Movie" was responsible for nearly half of Hasbro's revenue growth this quarter, and will continue to boost revenue in months to come.

But the other half of the revenue surge came courtesy of rising demand for some of Hasbro's oldest standbys. Brands like My Little Pony and Play-doh were standout performers for the quarter.

Nerf sales, for instance, increased 72 percent, while sales of Monopoly climbed 22 percent. The numbers give reason to be optimistic that low-tech toys are not approaching extinction.

Hasbro also raised its quarterly dividend from 12 cents to 16 cents a share, and said it completed a 2.5 million shares buyback during the quarter.

by Liz Gunnison