Tuesday April 25, 5:51 pm Eastern Time

## Pokemon Sales Lift Hasbro Earnings

By RACHEL ZOLL
Associated Press Writer

PROVIDENCE, R.I. (AP) -- Hasbro Inc.'s (NYSE:HAS - news) first-quarter earnings climbed about 10 percent over a year ago, beating analysts' expectations thanks to strong sales of Pokemon toys and games.

The Pawtucket, R.I.-based company earned $15.1 million, or 8 cents per share, for the quarter ended April 2, compared with $13.8 million, or 7 cents a share in the same quarter last year.

Analysts surveyed by First Call/Thomson Financial had expected the nation's second-largest toymaker to earn 1 cent a share.

Sales increased 16 percent to $773.5 million, compared to $668.4 million a year ago.

International sales more than doubled, fueled by trading cards and games based on the popular Japanese cartoon character Pokemon. U.S. sales also rose, but by a significantly smaller 3 percent.

``The international sales were huge, which led to better than expected performance,'' said Margaret Whitfield, analyst with Tucker Anthony Cleary Gull in New York.

Gains also came from sales of Play Doh, Easy Bake and Lite Brite products, along with traditional board games, such as Monopoly, Yahtzee and Trivial Pursuit.

Sales of Furby, the interactive furry doll introduced in 1998, continued to be strong, after selling 12 million units last year. But sales of the product were expected to slow slightly, said Rick Fradin, an analyst with William Blair & Co. in Chicago.

Strength in these divisions help offset troubles in other areas.

Hasbro said U.S. toy sales fell, partly due to disappointing performance of its toys based on ``Star Wars Episode I: The Phantom Menace,'' which was released last spring.

Too many different companies were selling Star Wars products, creating a glut in the market, said Hayley Kissel, an analyst with Merrill Lynch in New York.

``Hasbro got caught up in the hype and set some unrealistic expectations,'' Kissel said.

Revenues from interactive software games dropped to $22 million, compared to $38 million one year ago. Hasbro blamed the decline on an industry-wide slowdown.

Kissel agreed, saying retailers are trying to sell off inventory and many are waiting for major hardware launches later in the year before putting new software products on the market.

Hasbro also announced that its online games portal, Games.com, would be launched in the fall, instead of the summer as planned. Hasbro chief executive officer Alan Hassenfeld said the company was having trouble recruiting staff in a competitive hiring environment.

The company took a 1 cent per share charge for costs associated with Games.com.

``The online gaming initiative is certainly late, when you look at some competitors,'' Kissel said. ``It's too early to tell whether or not it's going to hurt them. It's an embryonic market.''

Hasbro results follow a strong 1999, when earnings increased about 30 percent to $286.6 million and sales increased 28 percent to $4.2 billion.

Looking ahead, the company is forecasting 5 percent growth in sales for its current fiscal year.

This month, the company is introducing new Pokemon Team Rocket trading cards and soon will introduce, among other products, a new baseball trading card game called MLB Showdown 2000 and an interactive, animated doll called My Real Baby.

Hasbro, which remains second to Mattel Inc. (NYSE:MAT - news), owns the Playskool, Kenner, Tonka, Milton Bradley, Parker Brothers, Galoob and Wizards of the Coast toy and game brands.

Hasbro's shares were up 31 1/4 cents at $16.06 1/4 at 5 p.m. EDT on the New York Stock Exchange.

Preserved here on Mystic Fortress' server to avoid a bad link in the future.
Article is quoted from Tiger Electronics and is not edited in any way.
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