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Hasbro posts 1Q loss
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April 23, 2001: 3:43 p.m. ET
Toymaker's loss wider then forecast on slow Pokemon, interactive game sales
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NEW YORK (CNNfn) - Hasbro Inc. posted a first-quarter loss Monday that was far wider than Wall Street estimates as the toymaker suffered from declining sales of its Pokemon games and interactive products that drove up revenue a year earlier.
Hasbro (HAS: up $0.01 to $11.80, Research, Estimates), the No. 2 U.S. toymaker whose brands also include Star Wars action figures and Play-doh, reported a loss of $25 million, or 15 cents per share, compared with profit of $15.1 million, or 8 cents per share, a year earlier.
Wall Street analysts polled by research firm First Call expected Hasbro to post a loss of 1 to 9 cents per share, with a consensus of 6 cents.
 The company said quarterly global net revenue fell 40 percent to $463.3 million from $773.5 million a year earlier.
"We've made significant progress in our cost savings initiatives, with reductions in all operating expense categories," Hasbro President Alfred Verrecchia said. "Hasbro's management team remains focused and the expense reduction initiatives we began last year are a major step towards our most important objective of returning as quickly as possible to the profitability levels we have had historically."
Pawtucket, R.I.-based Hasbro, which is in the midst of a restructuring that began in December with the elimination of 750 jobs and the sale of its interactive games unit, has been struggling as sales of licensed products, such as Pokemon and Furby, have plummeted.
The popularity of those items has waned significantly as analysts expected, but just how much surprised the Street.
"The magnitude of Pokemon and the drop-off is probably a little shocking," Merrill Lynch Analyst Hayley Kissel said. "Certainly we had it coming down a lot. This is just sort of a confirmation of how big it was."
However, Kissel said she was impressed that the loss was not greater given the big drop-off in licensed product sales, citing the company's recent cost-cutting efforts for helping to improve margins.
Hasbro chief financial officer David Hargreaves predicted the company will return to profitability by the end of the third quarter on the strength of new products. In the meantime, second-quarter earnings could look a lot like the first, he said.
Among the products slated to be released are toy lines to accompany the films "Jurassic Park III," "Harry Potter and the Sorcerer's Stone," and "Monsters Inc.," the latest Disney/Pixar computer-animated move. Also upcoming are B.I.O. Bugs, lifelike robotic insects that require regular "feedings" of infrared rays.
Last year, Hasbro agreed with Walt Disney Co. (DIS: down $1.23 to $30.13, Research, Estimates) to collaborate on projects for resorts, theme parks and hotels, which also gives Hasbro licensing rights for some Disney films and TV shows. 
-- from staff and wire reports
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