Hasbro 3rd-quarter results beat expectations

Discussion in 'Transformers News and Rumors' started by Foster, Oct 20, 2008.

  1. Foster

    Foster Super Mod

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    KYW Newsradio 1060

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    Last edited: Oct 20, 2008
  2. Eric

    Eric RIP AND TEAR!!!

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    Damn. Come on, Transfans, we need to buy MORE TRANSFORMERS! FOR THE ECONOMY!

    *runs off*
     
  3. SPLIT LIP

    SPLIT LIP Dry built

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    Hells yes. Any excuse to buy more toys.
     
  4. dark69

    dark69 BlackArachnia Terrorize!

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  5. BraveMax

    BraveMax Used to speak Japanese

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    Just to clarify...

    14% below last year, but "slightly more than analysts expected" is NOT good news.

    From WSJ: Article - WSJ.com

    A) Last year there was a tax gain in this quarter - that somewhat artificially inflated earnings, yes, by around 17 cents a share (according to the article), which means that Hasbro actually gained ~4.69% profit from this quarter last year.

    B) Inflation is high right now. That means their profits SHOULD have been ~5% higher than last year for them to be AT THE SAME LEVEL as last year. That means they're really down slightly from where they SHOULD be. It should also be noted that investors typically expect a RETURN on their money. That means Hasbro is REALLY doing around 2~3% below what people would expect for them to want to invest in Hasbro. All that is NOT counting the tax gain. Unfortunately, that tax gain DOES count as profit, and investors DO expect a gain above it. That means that Hasbro is earning around ~20% less than they should be to hit that target.

    So - the fact that they're doing better than a few analysts expected them to be doing... Is not really a comforting fact. They're still doing poorly, though it's difficult to tell how much of that is because people aren't spending money on toys (due to the economy, etc...), how much is due to rising costs that Hasbro can't pass on to the consumer, and how much is Hasbro's failure to adjust to the market.

    Most importantly, please note that Revenue rose 6.5% from this quarter last year. That means Hasbro is technically bringing in more money, but is able to convert less of that to profit. So Hasbro either doesn't feel they can pass the rise in costs along to the consumers, or they aren't efficiently adjusting to the market. Either way, that's a bad sign for Hasbro, NOT a good one. Evidently investors agree with me - Hasbro's stock has dropped ~8% today (http://online.wsj.com/quotes/main.html?symbol=HAS&type=usstock usfund&mod=DNH_S), despite the rest of the market rallying.

    As always, I welcome comments and criticisms for my arguments. I'm just basing them off what I've read and my basic background in finance...
     
  6. Foster

    Foster Super Mod

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    Full earnings transcript link and TF excerpt:

    Hasbro Q3 2008 Earnings Call Transcript - Seeking Alpha

     

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