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PROVIDENCE, R.I. - Hasbro Inc., the world's second-largest toymaker, said Monday its fourth-quarter profit rose 24 percent on a 16 percent increase in sales driven by its core brands like Transformers, Littlest Pet Shop and Star Wars.
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The company, which also makes Nerf and Playskool brands and board games like Monopoly and Operation, said it plans price increases this year to offset rising costs. Hasbro has avoided the lead-paint related recalls that plagued many of its competitors.
Its shares rose almost 2 percent in morning trading.
Hasbro said its profit rose to $133.7 million, or 84 cents per share, in the three months ended Dec. 30 from $108.3 million, or 62 cents a share, a year earlier.
Wall Street expected the company to report earnings of 81 cents per share for the latest quarter. The estimates typically exclude one-time items.
Sales climbed to $1.3 billion from $1.1 billion a year earlier.
Larger rival Mattel Inc. recently posted a 15 percent rise in its fourth-quarter profit, but faced negative publicity because of its recalls of millions of Chinese-made toys tainted with lead.
President and Chief Executive Alfred J. Verrecchia said that due to a 14 percent to 15 percent increases in costs, there will be price increases in 2008 because the company plans to hold its margins steady with those of 2007. He said he expected a strong 2008.
"We're in good shape inventory-wise. We've got a lot of momentum," he said.
This year, Hasbro expects Transformers to continue doing well due to an animated series that started in January. Star Wars and Spider-Man are also expected to release animated shows later this year.
Two Hasbro-related live-action movies are scheduled to be released in 2009 — Transformers 2 and G.I. Joe, based on the Hasbro action figure starts shooting Monday, Verrecchia said. Despite a Hollywood writers strike, there were no delays in the movies' production schedules, he said.
Hasbro's international revenues grew 29 percent to $489.2 million for the quarter, partly on better foreign exchange rates and also on the success of Transformers, Marvel, Littlest Pet Shop and other lines.
For the full year, Hasbro earned $330 million, or $1.97 a share, up from $230.1 million, or $1.29 a share, a year ago. Excluding taxes and the company's repurchase of outstanding warrants held by Lucasfilm Ltd. and Lucas Licensing Ltd., per share earnings were $2.03, the company said. Its revenue for the full year rose to $3.84 billion from $3.15 billion a year earlier.
The company this year repurchased 20.8 million shares of common stock at $587 million.
Its shares rose 49 cents, or 1.9 percent, to $26.36 in morning trading Monday after rising as high as $26.99 earlier in the session.
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