Hasbro’s thriving analog and digital games business helped its first-quarter profit beat Wall Street expectations, but Covid-19-related struggles in film and TV resulted in only a 1% uptick in revenue.
Total revenue came in at $1.15 billion, up only about $9.2 million from the year-ago quarter and just shy of analysts’ consensus forecast for $1.17 billion. Earnings per share of 84 cents soared above predictions for 65 cents.
The division focused on franchise brands like Magic: The Gathering, Play-Doh and Nerf posted a 24% jump in revenue to $492 million. TV and film revenue dropped 34% to $194 million, a decline the company blamed on pandemic-related theater closures and timing of deliveries for later in the year.
During a conference call with analysts, CEO Brian Goldner painted a bright picture of the company’s film and TV business. He said 2021 results will be at 2019 levels and that consumer concern about going to movie theaters will “dissipate as the situation continues to get better.”
Hasbro has more than 50 film and TV projects in development and Entertainment One, which it acquired in 2019 for $3.8 billion, has more than 200. Goldner highlighted upcoming entries in the Transformers and My Little Pony franchises and teased a trip to the U.S. by Peppa Pig in the preschool show’s forthcoming ninth season. A major revamp of the Power Rangers is also in the offing.
Profit in the quarter improved notably from a loss booked a year ago during the onset of the pandemic, when the company’s factories had to close for weeks. Goldner said demand for games has continued to be “robust.” With many families under one roof over the past year, sales of board games and other diversions have risen 30% from pre-Covid levels.
Goldner was asked multiple times about Hasbro’s sale of eOne’s music division to investment firm Blackstone in a $385 million deal announced late Monday.
When one analyst said the transaction resulted in a loss, Goldner replied, “The business was not, in fact, sold at a loss. We sold it, on a multiple basis, for far over what we had paid for it. Obviously, as we were acquiring eOne, we assigned certain values to certain elements of the business — music, television, film, other goodwill.” Compared with those 2019 valuations, he continued, there is a “book loss, just a true-up book loss that comes from the proceeds that we received from the acquisition.”
CFO Deborah Thomas said the divestiture of music would reduce annual revenue by $60 million to $70 million in the second half of 2021, making the sale “not expected to be material.”
The sale of eOne’s music division followed a “really robust process” with expressions of interest from “more than 10” parties, Goldner said. “It wasn’t that we were contemplating a sale, but we certainly had the interest from the beginning.”
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April 27, 2021 at 09:08PM
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Hasbro Fights Through Film And TV Slump As Toy And Game Strength Helps Q1 Profit Clear Wall Street’s Bar - Deadline
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