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What Should You Expect from Hasbro (HAS) in Q1 Earnings?

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One of the leading toymakers, Hasbro, Inc. (HAS - Free Report) is scheduled to report first-quarter 2017 results on Apr 24, before the opening bell.

Last quarter, Hasbro posted a positive earnings surprise of 28.13%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters, with an average beat of 27.07%.

Let’s see how things are shaping up for this announcement.

Hasbro, Inc. Price and EPS Surprise

Factors to Consider

Hasbro’s earnings and revenues surpassed the Zacks Consensus Estimate in all the trailing eight quarters. Strategic partnerships, rapid growth in emerging markets and a strong product lineup along with various sales-building initiatives have been driving top and bottom lines. We expect these factors to boost first-quarter results as well. Increased investments in digital gaming market are further likely to propel the quarter’s results. The company’s January launch of NERF NITRO – a unique line of blasters and launchable foam vehicles – should further propel revenues.

Notably, the Boys segment posted revenue growth for the 12th consecutive quarter in the fourth quarter and is expected to continue witnessing strong growth in the to-be-reported quarter as well. Despite the Girls segment making a turnaround in 2016 after a lackluster 2015, it remains to be seen if it can maintain its performance in the first quarter of 2017.

Moreover, foreign exchange losses and persistent higher costs related to initiatives could hurt the quarter’s margins amid an already challenging domestic sales environment. Further, weak performances at some of its brands like Playskool Heroes and core Playskool items could offset the growth derived from other well-performing counterparts.

Earnings Whispers

Our proven model does not conclusively show that Hasbro is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: Earnings ESP for Hasbro is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 37 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hasbro currently carries a Zacks Rank #3. However, an Earnings ESP of 0.00% makes surprise prediction difficult.

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some companies in the broader Consumer Discretionary sector to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Penn National Gaming, Inc. (PENN - Free Report) has an Earnings ESP of +20% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Callaway Golf Company (ELY - Free Report) has an Earnings ESP of +9.52% and a Zacks Rank #2.

MGM Resorts International (MGM - Free Report) has an Earnings ESP of +11.54% and a Zacks Rank #3.

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