Hasbro, the nation's second largest toymaker, reported a lower-than-expected drop in earnings for the second quarter resulting in a 9.49% gain in the company's stock price.  The reason for the expected decline was a drop in sales of Star Wars products which were down $84.8 million.  But other Hasbro lines made up a good portion of the Star Wars shortfall as the company's net revenue fell just 8% from $572.4 million to $527.8 million.  Among the key contributors was Wizards of the Coast's Magic the Gathering Collectible Card Game, sales of which were up 19% so far in 2006.

Board game sales also demonstrated a substantial 6% sales gain in North America, though Hasbro CEO Al Verrecchia noted in a conference call that it is too early to be sure if this upward trend in board game sales will continue since traditionally 65% of all such sales occur in the 4th quarter with 40% of the annual sales taking place in December.

G.I. Joe and Transformers sales were also up 5% over last year and though the actual amount of the sales on these two lines was not all that significant, Verrecchia was pleased with the momentum that these properties were developing.  Hasbro is banking on two major movie events in 2007, Spider-Man 3 and the new Steven Spielberg-produced Transformers film to boost the company's sales back to Star Wars levels and beyond.  Hasbro's Marvel Comics license (see 'Marvel Inks 5-Year Pact With Hasbro') kicks in next year and the Spider-Man movies have proven to be the most potent of the Marvel-based films in driving toy sales. Add to that the fact that Hasbro owns the Transformers property and stands to gain substantially if the film is a hit and you can see why investors are excited about the company's prospects especially if it can keep its 2006 sales close to 2005 numbers.