Transformers and GI Joe toy sales transform fortunes for Hasbro

 

The popularity of Transformers and GI Joe toys, combined with cost-cutting measures, have helped Hasbro post higher profits for the third quarter.

The Transformers line, which spawned the eponymous movie blockbusters, is one of Hasbro's biggest sellers. The second-largest US toymaker has moved away from traditional toys to pursue an entertainment-related strategy. This has paid off during the recession when other toymakers, such as Mattel, suffered lower profits.

Hasbro's chief executive, Brian Goldner, said: "Transformers continue to do exceedingly well and we expect Transformers to sell well through this year." In 2007, the toys generated sales of $484m (£297m).

Goldner said he expected Transformers to continue to be a big contributor next year. Toys based on the third movie in the Transformers series are due to hit the shelves next July.

GI Joe, My Little Pony and Star Wars toys are benefiting from related TV programmes, such as the Star Wars animated Clone Wars series.

Hasbro reported an 8.8% rise in profits to $150.4m, or 99 cents a share, in the three months to 27 September. The results beat Wall Street expectations of 93 cents a share.

However, the company's joint venture with Discovery Communications dented earnings per share by 3 cents.

Revenues fell by 2% to $1.28bn from $1.3bn a year ago.

Hasbro said its sales performance in North America, and internationally, reflected stronger sales of toys for boys, but this was offset by weaker sales of girls' and pre-school toys, and games and puzzles.

The company's revenues from entertainment and licensing more than doubled to $41.5m due to Transformers and GI Joe. The company has made Transformers models – typically an object such as a car which can be turned into a robot – since the 1980s. The popularity of the franchise has been boosted by the 2007 Transformers movie, and this year's sequel, Transformers: Revenge of the Fallen.

Goldner is confident of achieving higher revenues this year compared to last if consumer trends continue to "improve in line with recent fourth-quarter trends".

Last week, the country's biggest toymaker, Mattel, reported a 3.5% fall in profits, with sales down 8%. Mattel makes Hot Wheels and American Girl dolls.

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