July 23rd, 2007, filed by Justin Grant
Anticipation of strong sales from Hollywood blockbusters “Transformers” and “Spider-Man 3″ helped Hasbro’s shares surge nearly 75 percent in the last year, but the question of what’s next has caused some investors to pull back.
The stock fell as much as 5 percent on Monday despite Hasbro posting a better-than-expected quarterly profit on higher sales, which were boosted by strong demand for its Transformers and Spider-Man 3 toys.
“My sense is that people are looking at the strength this year as a good thing, but are concerned that Hasbro is going to be challenged to drive growth next year,” Arcadia Investment Corp. analyst John Taylor told Reuters. “The challenge with an entertainment business is that it probably has to be replaced next year. They’re not long-lived revenues,” he added.
Webush Morgan Securities analyst Sean McGowan sounded a similar theme. In a research note, he wrote that “investors considering the prospect of a negative earnings comparison in early 2008 may bid the stock down.”
Looking ahead, Hasbro will seek to drive growth over the second half of the year with new toy lines including board game version of the Fox TV show “Are you smarter than a 5th grader?,” a Littlest Pet Shop game, talking parrot Squawkers McCaw, the Power Tour Guitar and Peyton Manning Football.
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on Monday, July 23rd, 2007 at 5:11 pm and is filed under Reuters Shop Talk, Text.
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