NEW YORK (Reuters) - Hasbro Inc , the second-largest U.S. toy company, posted a better-than-expected fourth-quarter profit on Monday, boosted by strong demand for its Transformers, Nerf and Furreal Friends product lines.
Earnings rose to $133.7 million, or 84 cents a share, from $108.3 million, or 62 cents a share, a year earlier.
Quarterly sales rose 16 percent to $1.3 billion.
Analysts on average were expecting profit of 81 cents a share on sales of about $1.22 billion, according to Reuters Estimates.
BMO Capital Markets analyst Gerrick Johnson said the results were in line with Wall Street's expectations.
"I'm looking at that 28 percent increase in inventory and 60-basis-point decline in gross margin and wondering what happened there," Johnson said.
The results come two weeks after industry leader Mattel Inc
Sales during the quarter rose 8 percent at Hasbro's North American division, although operating profit fell 22 percent.
Hasbro's international segment sales, meanwhile, climbed 29 percent as operating profit rose 40 percent.
The fourth quarter is the most important time of year for toy companies because it includes the holiday shopping season, when the industry rings up nearly half its annual sales, according to market research firm NPD Group.
Last year, toys tied to the Transformers movie were a key driver of Hasbro's boys division. The company is banking on the Transformers animated television show helping the brand maintain its momentum this year until the movie sequel in 2009.
Later this year, the company will roll out toys tied to the films "Iron Man," "The Incredible Hulk" and "Indiana Jones and the Kingdom of the Crystal Skull."
(Reporting by Justin Grant, editing by Maureen Bavdek)
