By Shailaja Sharma
Hasbro (HAS), the second-largest U.S. toymaker, reported lower-than-expected quarterly revenue as sales of its games and preschool products fell for the second straight quarter.
Shares of the company, known for its My Little Pony toys and action figures based on "Transformers" films and Marvel Comics characters, fell as much as 3.6 percent Monday on the Nasdaq exchange.
Hasbro's U.S. and Canada sales declined 2 percent in the second quarter on lower demand for games as children shift to the electronic versions of the games on smartphones and tablets.
Sales of games, Hasbro's second-largest business that includes the high-margin trading card game Duel Masters, fell 12 percent, the highest decline in three years.
%VIRTUAL-article-sponsoredlinks%Hasbro expects games including My Monopoly, Simon Swipe and Battle Masters featuring "Transformers" and Marvel Comics characters to boost sales in the holiday season, Chief Executive Officer Brian Goldner said on a post-earnings conference call.
"We have compelling new innovative games across consumer groups," Goldner said.
Last week, larger rival Mattel (MAT) reported a 17 percent fall in quarterly sales of its Fisher-Price preschool products.
Mattel also posted its third straight fall in quarterly revenue as demand for its traditional toys in North America remained weak and sales of its Barbie doll declined the most since mid-2009.
While Hasbro's sales of games and preschool products remained weak in the quarter ended June 29, the company saw strong demand for its action toys amid the release of the latest "Transformers" and "Spider-Man" movies.
Hasbro owns the "Transformers" brand and holds toy licenses for Marvel Comics' characters such as Spider-Man and Iron Man, who have had phenomenal box office success over the past few years.
Total revenue rose about 8 percent to $829.3 million as international sales jumped 17 percent, driven by double-digit growth in Europe, Latin America and Asia-Pacific region.
Sales of boys' toys, Hasbro's largest business, rose 32 percent. Sales of girls' toys such as My Little Pony and Nerf Rebelle bow and arrow toys, which drove the company's revenue in the March quarter, rose 10 percent.
The company's net income fell 8.2 percent to $33.5 million, or 26 cents a share. Excluding items, Hasbro earned 36 cents a share.
Analysts on average had expected a profit of 36 cents a share on revenue of $839 million, according to Thomson Reuters I/B/E/S.
Hasbro's shares were down 2.9 percent at $51.64 in late morning trading. The stock had risen 14 percent this year to Friday's close.
By Shailaja Sharma