Hasbro soars after Disney toy sales help it overcome trade-war challenges
- Hasbro stock surged as much as 9% in early Tuesday trading after the company topped expectations for fourth-quarter profit and saw revenue land just under analyst estimates.
- The holiday season drove strong demand for "Star Wars" and "Frozen 2" merchandise, the toy manufacturer said.
- The earnings win follows a third-quarter stumble, when trade war tariffs and foreign exchange charges pushed profits and sales below Wall Street's hopes.
- Watch Hasbro trade live here.
Hasbro shares leaped as much as 9% in early Tuesday trading after the company bested estimates for fourth-quarter profit.
The toy manufacturer's quarterly revenue fell just under Wall Street's expectations. Sales were propped up by strong holiday retail activity and demand for "Star Wars" and "Frozen 2" merchandise, according to Hasbro.
The post-earnings jump marks a sharp reversal from the company's third-quarter stumble. The three-month period saw earnings and revenue fall under expectations, driving shares as much as 11% lower. Hasbro cited continued "disruption" as the company worked to mitigate price hikes driven by the US-China trade war and resulting tariffs.
Here are the key numbers:
Revenue: $1.43 billion, versus the $1.44 billion estimate
Adjusted earnings per share: $1.24, versus the 88 cents estimate
Adjusted Ebitda: $275.7 million, versus the $225.2 million estimate and up 15% year-over-year
The company closed its acquisition of media production firm Entertainment One in the first quarter of 2020, though financial results related to the outlet weren't included in the latest report. The $4 billion purchase was first announced in late August, and foreign exchange charges related to the buyout dragged on the company's profits in the third quarter of 2019.
Hasbro's acquisition gives it the rights to popular brands including "Peppa Pig" and "PJ Masks," setting the manufacturer up for continued growth in its entertainment, licensing, and digital business. The segment's revenue growth jumped 22% in 2019, and operating profit surged to $99.7 million from $29.1 million the year prior.
"Our teams worked extremely hard and executed at a high level this holiday, driving fourth quarter and full-year revenue and profit growth while also diversifying our supply chain and preparing to close a major acquisition," Chief Financial Officer Deborah Thomas said in the report.
Hasbro closed at $100.90 per share on Monday, down 4.1% year-to-date.
The company has 11 "buy" ratings, seven "hold" ratings, and no "sell" ratings from analysts, with a consensus price target of $115, according to Bloomberg data.
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