US toy giant Hasbro has reported a US$4.6m drop in profit from its entertainment and licensing ventures in the third quarter compared with the same period a year ago.
The firm made US$10.7m from the part of its business that include its joint venture with Discovery – kids’ and family channel The Hub – compared with US$15.3m in Q3, 2011.
However, content for both television and cinema is helping to build Hasbro’s global brand franchises, the company’s president and CEO Brian Goldner told investors in a conference call hosted by market analyst Seeking Alpha.
Hasbro continues to benefit from growing revenue from the sale of TV programming in the US and overseas, “offset by lower movie-related revenues,” added Deborah Thomas, chief financial officer at Hasbro.
Hasbro has spent US$61.6m on television programming over the past 12 months, Thomas said. Meanwhile, the ratings of Hasbro Studios’ TV shows have outperformed those of other progrommes on The Hub by 74%, Goldner said.
“As we continue to gain production efficiencies, we anticipate spending less on programming from a cash standpoint and now expect cash spend to be in the US$50m to US$60m range for the current year,” Thomas said.
“For the third quarter 2012, our share of the earnings in The Hub was a loss of US$1.8m, compared with a loss of US$1.5m a year ago. We continue to expect The Hub’s impact for the full year 2012 to be in line with 2011 levels.”
Hasbro’s licensing business includes the brands Monopoly, GI Joe, Nerf and Mr Potato Head.
Overall, the company reported net earnings for the quarter of US$164.9m, compared with US$171m for the same period a year earlier.
Analysts had predicted sales would drop more significantly over the past year. Instead, profit exceeded expectations, which was put down to better inventory management and cost controls.
Hasbro said it had seen growth in the girls and games categories, which partially offset declines in boys and preschool.
“We are delivering on the objectives we set for the year,” added Goldner.