The Wall Street Journal-20080212-Earnings Digest- Hasbro Chief to Leave on High Note

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Earnings Digest: Hasbro Chief to Leave on High Note

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Hasbro Inc. said its fourth-quarter profit rose 24%, and the toy maker's chief executive announced his retirement.

Chief Operating Officer Brian Goldner will succeed Al Verrecchia, who will become the chairman. Alan Hassenfeld, who currently fills that role in a nonexecutive capacity, will remain a board member. Mr. Hassenfeld, who stepped down as CEO in 2003 and whose grandfather started the business, has been with the company since 1970. The changes are effective May 22.

Mr. Verrecchia, who turns 65 years old this week, has worked for Hasbro for 43 years, including five years as CEO. Mr. Goldner, 44, joined Hasbro in 2000 and became operating chief in 2006.

Hasbro said its profit rise was driven by its core brands like Transformers, Littlest Pet Shop and Star Wars, though gross margins and U.S. earnings were weaker.

The Pawtucket, R.I., company, which also makes Nerf and Playskool brands and board games such as Monopoly and Operation, said it plans price increases this year to offset rising costs.

Hasbro has avoided the lead-paint recalls that ensnared larger rival Mattel Inc. But even though the company wasn't forced to remove its products from shelves, all toy makers are stepping up safety and quality testing, adding to already-high commodity, labor and transportation costs.

Amid a shaky economy, Hasbro, like Mattel, is leaning heavily on products linked to movies.

Transformer toy sales have been a bright spot for Hasbro the past few years, and the recent film based on the toy property was a summer blockbuster. Mr. Goldner served as executive producer on the project.

Hasbro has toys coming out this year based on "Indiana Jones and the Kingdom of the Crystal Skull," "The Incredible Hulk," "Iron Man" and animated versions of Spider-Man and Star Wars. There are also a Transformers sequel and G.I Joe movie in the works.

In the latest quarter, North American profit fell 22%, while revenue grew 7.6%. International earnings jumped 40%. Hasbro's international revenue grew 29%, partly because of the weak dollar.

Since the end of the quarter, Hasbro closed its $77.5 million deal to buy educational-toy maker Cranium Inc., boosted its quarterly cash dividend 25% and announced a $500 million share repurchase.

Hasbro shares rose 54 cents, or 2.1%, to $26.41 in 4 p.m. New York Stock Exchange composite trading.

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Angela Moore contributed to this article.