(By Balaseshan) Hasbro Inc. (NASDAQ: HAS), which provides children's and family leisure time products and services, expects fourth quarter revenue below consensus as consumer demand through much of the holiday season was less than anticipated, sending its shares down 4.55% in premarket.
The company expects to incur charges of about $37 million pre-tax in 2012, and an additional estimated $20-$30 million in 2013 associated with these planned actions to reduce ongoing expenses, including an approximate 10% reduction in workforce, facility consolidation and process improvements.
These actions are anticipated to begin to deliver savings in 2013, with full recognition in 2015 as all aspects of the plan are implemented.
The company projects revenue for the fourth quarter to be about $1.28 billion, including a negative $8 million impact from foreign exchange, compared to $1.33 billion in 2011. Street analysts predict revenue of $1.40 billion.
"We had a number of strong product initiatives, but consumer demand through much of the holiday season was less than anticipated in both the U. S. and certain international markets. As a result, fourth quarter revenues did not meet our expectations," said Brian Goldner, Chief Executive of Hasbro.
"Despite the lower than anticipated revenue, we grew our operating profit margin and earnings per share absent fourth quarter restructuring charges and the impact of foreign exchange," Goldner added.
For the full year 2012, the company expects to report revenue of about $4.09 billion, compared to $4.29 billion in 2011. Absent a $99 million negative impact from foreign exchange, full year revenue declined 2%. Street predicts $4.21 billion revenue.
Based on preliminary full-year results, Hasbro expects full year 2012 earnings per share, excluding fourth quarter restructuring charges and unfavorable impact of foreign exchange, of $2.83 to $2.85, while Street predicts $2.85. Earnings forecast includes $11.1 million or $0.06 per share of severance costs recorded in the first quarter 2012.
HAS closed Thursday's regular session at $38.45. The stock has been trading between $32 and $39.98 for the past 52 weeks.