October 22, 2019
Hasbro Oct. 22 reported a 20% increase in entertainment, licensing and digital segment revenue to $115.8 million compared to $96.8 million in the previous-year period.
Increased revenue was driven by Magic: The Gathering Arena and Paramount Pictures’ Bumblebee film revenue, partially offset by lower digital streaming revenue for Hasbro television programming.
Hasbro owns the rights to the “Transformers,” “G.I. Joe,” “Dungeons & Dragons” and “Micronauts” brands on which Paramount bases much of its theatrical slate.
Netflix is reportedly on board to produce the “Magic” feature film after a previous deal with 20th Century Fox never materialized.
Entertainment, licensing and digital segment operating profit decreased 21% to $24.6 million versus $37.1 million in 2018. The decline was the result of several factors, including higher operating profit margin in Q3 2018, due to the multi-year digital streaming agreement for Hasbro television programming.
Separately, CEO Brian Goldner said he expects to close Hasbro’s $4.3 billion acquisition of Canadian-based eOne in the current quarter.
“The strategic opportunity to bring onboard the brands, capabilities and talent from eOne is compelling to our long-term prospects as a leading global play and entertainment company and we look forward to sharing more about our plans after the close,” Goldner said in a statement.
Universal Pictures Home Entertainment and eOne in March signed a multiyear, multi-territory distribution agreement whereby UPHE will serve as the home entertainment distributor of eOne’s content across both transactional physical and digital formats.
Finally, Goldner said ongoing proposed government tariffs on Chinese manufactured goods would negatively impact product shipments and retailers entering the key winter holiday season.
CFO Deborah Thomas said the company experienced higher shipping and warehousing expenses as a result of the disruption and shift of retailer order patterns from proposed tariffs.
“Hasbro’s global teams are executing within a dynamic trade environment that is impacting the timing of revenues, driving incremental expenses and putting upward pressure on our underlying tax rate,” Thomas said.
Net revenue for the third quarter was $1.58 billion versus $1.57 billion in 2018. Net income was nearly $213 million compared to income of $264 million last year.