Hasbro (HAS)

FY 2009 earnings show that Hasbro is doing exceedingly better during the economic downturn than its main competitor Mattel. Hasbro's 2009 net sales increased 1.1% whereas Mattel's net sales during the same period fell 8%, even though it sold more toys than Hasbro.

Hasbro has been reaping the benefits from its newest entertainment and licensing segments. The company's two summer blockbusters Transformers: Revenge of the Fallen and G.I. Joe: The Rise of Cobra boosted summer revenues as toys related to the movies sold extremely well. In order to reap the benefits from the spring 2010 blockbuster "Iron Man II", the company began selling Iron Man II toys as early as January 2010.

Rumors have it that Hasbro may become the next Marvel and start capitalizing on movie franchises; Transformers was the #1 grossing film worldwide this summer. The company has already announced that a squeal to the G.I. Joe movie is already in the works and that Transformers 3 will be released on July 1, 2011.

In Q3 2010, Hasbro reported strong earnings that beat analyst expectations. The company's revenue and net income both increased by 3%, despite not having a movie blockbuster (like Transformers or G.I. Joe) spark toy sales. Rather, the company had a 9% growth in its preschool toys segment, and had strong growth from board game sales like Monopoly. More sales of non-movie-tied toys are a sign of economic recovery as evidenced by the results of the 2010 holiday shopping season. In order to prepare for the 2010 holiday season, the company increased its inventory in order to meet higher levels of demand. Analysts said that popular toys sold well, particularly in the final days of the holiday season. Inventory levels were consistent across the season and are in good shape heading into calendar 2011. Strong holiday results is good news for Hasbro's Q4 2010 earnings.

The growth in revenue from Hasbro's entertainment segment should have investors excited for this coming summer as the toy company is braced to reap the benefits from movie blockbusters. Transformers 3 will be released on July 1, 2011 - Transformers 2 was the highest grossing movie in the summer of 2009. Two new movie franchises will also be released this summer: Thor and Captain America. If Hasbro can once again continue to benefit from toy sales based on these movies, the company will be in for a great summer.

Summer blockbuster movies such as Spider-Man 3 and Transformers should propel sales of the corresponding toy lines to high levels. Sales of Star Wars merchandise remain strong long after the 2005 release of the last Star Wars movie.

The growth in revenue from Hasbro's entertainment segment should have investors excited for this coming summer as the toy company is braced to reap the benefits from movie blockbusters. Transformers 3 will be released on July 1, 2011 -- Transformers 2 was the highest grossing movie in the summer of 2009. Two new movie franchises will also be released this summer: Thor and Captain America. If Hasbro can once again continue to benefit from toy sales based on these movies, the company will be in for a great summer.

A wide range of internationally recognized brands presents a great opportunity to expand into digital media, such as internet video games. Many of these digital applications of brands could be key in securing market share in the "tween" demographic.

In recent years Hasbro has shown a knack for identifying toy crazes such as Pokemon and negotiating potentially lucrative licensing agreements to supplement sales of its myriad popular brands and products.