UPDATE 4-Hasbro quarterly revenue falls short, profit beats

* Retailers building toy inventories slowly – analyst

* EPS 29 cents vs Wall St. view 24 cents, revenue misses

* Expects better revenue performance in 2nd half of year

* Shares down 1.25 percent in midday trading
(Adds analyst comment and look ahead toward holiday season)

By Dhanya Skariachan and Emily Stephenson

NEW YORK/CHICAGO, July 19 (BestGrowthStock) – Hasbro Inc (HAS.N: ) on
Monday posted a sharper-than-expected quarterly sales decline
from a year ago when it benefited from merchandising tie-ins to
Hollywood blockbusters like “G.I. Joe.”

Hasbro, which owns brands from Monopoly to Playskool, beat
analysts’ earnings expectations for the second quarter by
cutting costs, including advertising.

With the summer movie blockbuster season nearing an end,
Hasbro, larger rival Mattel Inc (MAT.O: ) and their investors
will focus on the holiday season. Hasbro said it expects better
sales from new projects in the second half of the year.

As retailers have tightened inventories in recent years,
they have been buying toys from manufacturers later, Sterne,
Agee and Leach analyst Margaret Whitfield said.

“It sounds like in both cases their retail sales are doing
relatively well, but retailers are being tightfisted in
general,” Whitfield said.

“They’re not exactly building inventory at this early
stage,” she added. “We think once again Hasbro and Mattel toys
will be at the top of the list, apart from Lego, for purchases
in the holidays.”

On Friday, Mattel reported smaller-than-expected profit
because of the weak euro. [ID:nN16196946].
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(For a graphic comparing Hasbro’s performance with Mattel,
click on http://link.reuters.com/wem38m)
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Hasbro, the No. 2 U.S. toymaker, said sales in its boys’
toys unit fell from last year’s strong sales tied to the
“Transformers: Revenge of the Fallen” and “G.I. Joe: The Rise
of Cobra” movies. Mattel, by contrast, saw sales helped during
the quarter by toys related to “Toy Story 3”.

Hasbro said revenue and earnings per share should rise this
year and that it would benefit from new projects, including a
new children’s television network called “The Hub,” a joint
venture with Discovery Communications Inc (DISCA.O: ).

The company is creating Hasbro Studios to produce
programming for The Hub.

Hasbro’s second-quarter net profit rose to $43.6 million,
or 29 cents a share, from $39.3 million, or 26 cents a share, a
year earlier. Analysts on average expected earnings of 24 cents
a share, according to Thomson Reuters I/B/E/S.

Sales fell 7 percent to $737.8 million, missing analysts’
average forecast of $748.3 million. The company curtailed
advertising and other costs to offset the weakness.

Last month, Hasbro denied a Wall Street Journal report that
it was for sale. The company held talks with Providence Equity,
a buyout and investment firm that, like Hasbro, is based in
Rhode Island, sources said at the time. [ID:nN24123501]

Some analysts still consider it an attractive buyout
candidate for an entertainment company. Hasbro holds licenses
to make merchandise tied to upcoming movies such as “The First
Avenger: Captain America” and “Spider-Man 4”.

Last December, Hasbro signed a 10-year deal to make and
sell toys and games based on characters in the American
children’s television series “Sesame Street.”

Hasbro’s stock, which has risen almost 23 percent in the
past 6 months, was down 1.25 percent Monday morning.

Stock Market Trading

(Reporting by Dhanya Skariachan and Emily Stephenson; Editing
by Lisa Von Ahn and Robert MacMillan)

UPDATE 4-Hasbro quarterly revenue falls short, profit beats