Hasbro to prove strength in toyland, Mattel troubled
October 19, 2008 - 0:0
NEW YORK (Reuters) -– Monopoly game maker Hasbro Inc (HAS.N) may be faring better than rival and Barbie-maker Mattel Inc (MAT.N) as consumers cut spending in the face of harsher economic times.
The two U.S. companies are due to report quarterly results on Monday, with Hasbro expected to show a higher profit, while Mattel's bottom line will likely be weighed down by issues such as its legal dispute over the Bratz doll collection.""My gut tells me that Hasbro is going to do better relative to expectations than Mattel,"" Wedbush Morgan Securities analyst Chris White said. ""Their business has been stronger over recent quarters. You just continue the trend forward.""
On average, analysts expect Mattel to post a profit before items of 71 cents per share in the third quarter, up from 68 cents per share a year ago, according to Reuters Estimates.
For Hasbro, the analysts expect a profit of 86 cents per share, up from 78 cents per share.
But Mattel has more issues to contend with than its rival. The owner of Elmo and Dora the Explorer derives 40 to 45 percent of its revenue from overseas markets, which means the U.S. dollar's relatively recent strengthening could hurt its results.
White also expected that Mattel's revenue growth rate could shrink to 7 percent for the third quarter, down from 11 percent in the second quarter.
Hasbro's international sales are around 35 percent of its annual sales.
Hasbro also benefits in the current economy as consumers shun vacations and stay home to play board games like Monopoly, said Sterne Agee analyst Margaret Whitfield.