Hasbro Posts Loss as Toy Sales Decline NEW YORK (Reuters) - Hasbro Inc. (HAS.N: Quote , Profile , Research ) , the No. 2 U.S. toy maker, on Monday reported an unexpected first-quarter net loss, hurt by lower sales in games and its international business, sending its shares down 3 percent. Hasbro's Chief Executive Alfred Verrecchia said on a conference call with analysts that the 2005 retail environment "will continue to be challenging" and he noted pressure from high oil and other raw materials prices. Hasbro, which makes My Little Pony and Mr. Potato Head toys, posted a net loss of $3.7 million, or 2 cents a share, compared with a year-earlier profit of $6.5 million, or 3 cents a share. Net revenue fell 4 percent, to $454.9 million. Analysts on average had been expecting it to earn a profit of 4 cents a share and post revenue of $488.04 million, according to Reuters Estimates. Hasbro's loss comes on the heels of weak results last week from its chief rival, Mattel Inc. (MAT.N: Quote , Profile , Research ) , which reported a steep drop in profits on tougher competition and slowing sales of some key items. First quarter "is the smallest quarter of the year and not necessarily indicative of future demand," Banc of America analyst Gary Cooper said in a research note. "Still Hasbro's revenue declined despite the initial shipments of high-margin Star Wars products." The toy industry continues to face meaningful challenges, Cooper wrote, including a difficult retail environment, higher commodity costs making plastic more expensive and potential yuan revaluation or higher tariffs on Chinese-produced goods. One of the top retailers Toys R Us Inc. (TOY.N: Quote , Profile , Research ) , recently agreed to a takeover by two private equity firms and a real estate group, and is expected to close some stores. There has been little guidance on plans for the company, leaving many toy industry questions unanswered. "We will have to wait until later in the year to better understand the intentions of the new owners," Verrecchia said. "Additionally, we still don't know if KB (Toys) will emerge from bankruptcy ... it remains unclear just how many storefronts the industry may lose and when." Revenue in the U.S. Toys segment, which includes products such as the Easy-Bake oven, Tonka trucks and Play-Doh, rose to $166.5 million from $152.4 million a year ago, boosted by early sales of Star Wars merchandise. Games segment revenue was $99 million for the quarter, down from $127.6 million a year earlier. The unit was hurt by a drop in its trading-card business, which has a higher profit margin than board games. International revenue was $177.9 million, compared to $180.7 million a year ago. Excluding a $7.1 million boost from foreign exchange, international revenue fell 5.5 percent to $170.8 million. Hasbro shares were down 2 percent, or 39 cents, at $18.90 in morning trading on the New York Stock Exchange. Quelle "Hasbro Posts Loss as Toy Sales Decline" : reuters.com Main page for "Hasbro Posts Loss as Toy Sales Decline"