The Force Not Strong With Hasbro In Q3; Earnings Drop

ByBridge News Hasbro Inc., the United States' second-largest toy maker, said Oct. 12 it will eliminate 500 jobs and report lower-than-expected third-quarter earnings because of weak demand for Pokemon toys and Star Wars products. The Pawtucket, R.I.-based company warned that earnings would be between 6 and 10 cents a share, far below the Wall Street consensus estimate of 32 cents a share. Calling the results "disappointing," President and Chief Operating Officer Alfred J. Verrecchia pledged that Hasbro would achieve savings through consolidating its manufacturing operations and cutting product development, sales and marketing, and administrative costs. The company said it will cut 5% of its workforce, close facilities in Cincinnati; Napa, Calif.; and San Francisco by year-end and transfer some Cincinnati staff to its headquarters in Rhode Island. The company expects savings of about $100 million as a result of the actions. Also, Hasbro will outsource about 75% of its sales volume and move more product design and manufacturing to the Far East, "where it can be done more economically and faster and improve margins as well as time to market," says Verrechia.