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Hasbro stock plummets more than 15% as Q3 earnings miss analysts' expectations

Toymaker Hasbro Inc.'s stock was down more than 15% during morning trading Oct. 22 as it reported third-quarter adjusted diluted EPS, adjusted net earnings and revenue that missed analysts' expectations, primarily due to higher costs amid trade uncertainty.

For the quarter ended Sept. 29, adjusted diluted EPS came in at $1.84, down from $1.93 in the year-ago period and missing the S&P Global Market Intelligence normalized EPS estimate of $2.20.

Adjusted net earnings for the three-month period decreased to $233.8 million from $246.5 million a year ago. The Market Intelligence estimate for net income excluding exceptions was $281.2 million.

The Rhode Island-based company's revenue grew to $1.58 billion from $1.57 billion in the prior-year period but was below the analysts' expectations of $1.71 billion. Revenue rose 20% year over year from the entertainment, licensing and digital segment. It was offset by a 2% decline in the U.S. and Canada segment and remained flat in the international segment.

Chairman and CEO Brian Goldner, commenting on the third-quarter earnings, said the threat of tariffs from China resulted in higher costs for the company.

In addition, Hasbro said it incurred an after-tax foreign exchange loss of $20.9 million, or 16 cents per diluted share, due to its £3.3 billion acquisition of Entertainment One Ltd. The company expects to close the deal, which Entertainment One shareholders approved, in the fourth quarter of 2019.

Meanwhile, the company repurchased a total of $1.5 million worth of its common stock, at an average price of $104.82 per share, during the quarter.

Hasbro also issued a quarterly cash dividend of 68 cents per common share. The dividend is payable Nov. 15 to shareholders of record at the close of business on Nov. 1.

The company's stock was trading about 15.6% down at $101.40 per share during morning trading.