Hasbro Reports Big Loss; Cuts Jobs

Hasbro's loss for fiscal Q4 was $1.05 a share ($180.1 million), compared to a profit of 29 cents a share ($57.7 million) in the same period last year. Sales for the quarter were off $400 million from last year, to $1.2 billion. The dismal performance was blamed on poor sales of Pokemon, Furby and Star Wars products -- as well as a significant writedown on the sale of the Hasbro Interactive division and Games.com portal, both of which were acquired by Infogrames. Hasbro Interactive and Games.com accounted for nearly $112 million in losses during the year. The net loss for the year was $23 million, and as a result, the company said it will cut 100 jobs overseas in addition to the 750 layoffs announced between October and December. The company currently employs approximately 10,000 people worldwide. What may be more troubling for the toy maker is the status of its debt. After the earnings report was released, Standard & Poor's downgraded Hasbro's debt ratings to junk status. This makes it more difficult and costly for the company to raise capital in the future. And with a hefty debt-to-capital ratio of 51%, the company needs to turn things around pretty quickly.