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Q4 2018 Earnings in Focus


While we continue to monitor Q4 earnings season — which is currently completing its heaviest week, in terms of quantity, so far — we also see the ratcheting down of marquee names reporting this morning, or even after the bell next week.

Notably this morning, Hasbro HAS has missed badly and Mattel MAT outperformed. Both companies exist within the morass of the Toys – Games – Hobbies sector, which is nothing to write home about. But one company has managed to surpass expectations while the other has disappointed.

Hasbro, a Zacks Rank #4 (Sell)-rated company before the earnings report, put up just $1.33 per share in its Q4 bottom line, in contrast to the $1.68 expected. This amounts to a 42% downgrade year over year. Revenues also came in light: $1.39 billion versus $1.524 billion estimated. This is the third EPS miss in the last 4 quarters for the company, although part of its costs relate to the continuation of the Toys R Us liquidation.

Mattel, on the other hand, also had a Toys R Us issue, but managed to swing to a profit of 4 cents per share in its Q4 earnings, as opposed to the -11 cents analyst were thinking. Sales of $1.524 billion in the quarter was well ahead of the $1.418 billion expected. Worldwide grosses were down 11% year over year, and only 2% of that can be attributed to foreign exchange rates. The company’s numbers per business were still down year over year, but this represents the third straight quarterly beat, following SEVEN straight quarters of earnings misses.

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