Earnings Sack Jakks Shares

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Shares in Jakks Pacific Inc. plummeted 16 percent Wednesday after the toymaker reported a dip in profit due to a double-digit hike in costs.


Jakks reported that second-quarter net income fell 21 percent to $5 million (17 cents per share), from $6.4 million (22 cents) from the same period a year earlier. Analysts polled by Thomson Financial expected earnings per share of 25 cents.


Sales for the Malibu toymaker rose 4 percent to $129 million, just short of Wall Street’s expectations of $131 million.


Jaaks said that a 13 percent hike in the cost of materials, royalty expenses and the amortization of tools and molds offset the rise in sales.


However, the toymaker affirmed its 2007 full-year earnings guidance, saying it expects its new products to sell well in stores. Jakks said it expects to earn about $76 million ($2.39 per share), on revenue of $800 million for the year slightly ahead of the $2.38 per share on sales of $798 million Wall Street is expecting, according to a poll by Thomson Financial.


Shares in Jaaks fell $4.82 to $25.10 in afternoon trading Wednesday on the Nasdaq.

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