Hasbro to Cut 100 Jobs After Quarterly Loss
Hasbro Inc. on Thursday reported a fourth-quarter loss, its first in almost a decade, and said it plans to fire 100 more workers as the popularity of Pokemon trading cards plummeted.
The world’s second-largest toy maker said its loss from operations was $58.4 million, or 34 cents a share, compared with profit of $155.4 million, or 79 cents, a year earlier.
Sales dropped 27% to $1.16 billion, hurt also by weaker demand for its Furby and Star Wars products that were a big hit a year ago.
The red ink was not quite as bad as Wall Street had expected. Analysts, on average, had tabbed Hasbro to lose 37 cents, according to First Call/Thomson Financial. In December, the company slashed expectations for the fourth quarter and full year.
Hasbro, the No. 2 toy maker after Mattel Inc., said it lost $144.6 million, or 82 cents a share, for the year, contrasted with 1999 profit of $286.6 million, or $1.42, as revenue declined 11% to $3.8 billion.
Chief Executive Alan Hassenfeld called Hasbro’s dismal performance in 2000 an aberration and promised the company would return to profitability this year. He declined to be specific.
The latest job cuts are in addition to the 750 announced late last year. Hasbro, which also makes PlaySkool, Tonka and Milton Bradley brand toys and games, employs about 10,000 people worldwide.
Toy sales plunged industrywide last year. Hasbro, as well as El Segundo-based Mattel, is trying to reduce its reliance on licensing and to build predictable earnings and revenue growth driven by an array of steady brands.
Hassenfeld is trying to expand traditional lines such as Play-Doh while developing new ones, including Harry Potter trading cards. He is closing plants as well as cutting jobs, and has shed the unprofitable electronic-games unit.
This is the third quarter in a row that Hasbro’s earnings have been hurt by the decline of Pokemon, Furby and Star Wars toys.
After the earnings report, credit rating agency Standard & Poor’s downgraded Hasbro’s debt ratings to junk status.
Shares of Hasbro closed up 17 cents at $13.08 on the New York Stock Exchange.
