Toy maker Hasbro Inc. said Thursday its first-quarter profit tumbled 71 percent as weakness persisted in games, puzzles and its girls' toy lines. The company also invested in new product development and spent on staffing its joint-venture TV station.
Toys for boys were a bright spot during the quarter, typically a small one for toy makers since it comes just after the crucial holiday season.
But earnings missed Wall Street expectations and Hasbro shares dropped $1.29, or 2.8 percent, to $44.50 in pre-market trading.
Hasbro has been developing new electronic and TV-show versions of its classic game brands including Monopoly and Life.
It also has some toys tied into major summer blockbusters hitting shelves soon, including "Thor," due out May 6, "Captain America," out July 22 and "Transformers: Dark Side of the Moon," out July 1.
Hasbro said its net income fell 71 percent to $17.2 million, or 12 cents per share, in the January-March period, down from $58.9 million, or 40 cents per share, in the prior year period. Analysts expected earnings of 17 cents per share, according to FactSet.
Revenue was nearly flat at $672 million, but that was higher than the $659.1 million analysts expected.
Pawtucket, R.I.-based Hasbro said the net income decline reflects investments in product development, emerging markets and its joint venture television network The Hub.
The first quarter, coming after the crucial holiday season quarter, is generally a small one for toy makers. Hasbro reported last quarter its games and puzzles category, including such classic games as Scrabble and Monopoly, was weak late in the quarter.
That trend continued in the first quarter, with games and puzzle revenue down 12 percent to $200.4 million. Girl's toys and preschool toys also declined.
Not all categories were weak, however. Revenue from toys for boys, including the popular Nerf brand, rose 25 percent to $290.2 million.
International revenue rose 15 percent to $254.3 million, while revenue from the U.S. and Canada fell 8 percent to $391.2 million.
Hasbro's chief rival Mattel Inc. reports first-quarter results on Friday.
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