Hasbro’s second quarter earnings beat Wall Street estimates as revenues grew by 1% or $7.9 million largely due to a 19% increase in sales in the “boys category” with Transformers, G.I. Joe, and Nerf driving sales.  The chart-topping success of Transformers: Revenge of the Fallen is the engine behind many of these sales.  When the first Transformers film bowed in the summer of 2007, Hasbro sold some $484 million worth of Transformers toys with 69% of those sales in Q3 and Q4.  Hasbro has an even more extensive line of Transformers items this time around, but it will also face competition in the boys’ category from its own G.I. Joe toys, which are just arriving at retail now in advance of the August opening of G.I. Joe: Revenge of the Cobra.

Hasbro CEO Brian Goldner told analysts that sales in the Games & Puzzles category, which include Wizards of the Coast, were down 17% for the second quarter, but he attributed the drop to “the timing of shipments for promotional programs we are executing over the coming months.”

The cost of Hasbro’s acquisition of a 50% stake in the Discovery Kids channel (see “Hasbro Buys Into Discovery Kids”) has turned out to be less than expected, which also helped brighten the Q2 picture.  But Hasbro's investment in the cable channel is about more than just securing a venue for TV series based on its properties.  Hasbro is going to be producing many of the shows based on properties it owns.  Goldner reported that Hasbro was in the process of hiring “a Hasbro studio head and assembling a creative team charged with developing and producing programming for the network.”  Goldner indicated that the re-branded cable channel should launch in the fall of 2010 with 6-8 shows based on Hasbro properties debuting over the six-month launch period.