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Sunday February 18, 2018



Hasbro Reports Strong Profits

Hasbro, Inc. (HAS) reported its quarterly and full-year earnings on Monday, February 6. The toy company reported record revenue for the year.

Revenue was $1.63 billion for the quarter, up 11% from $1.47 billion during the same quarter last year. For the full year, revenue increased 13% to $5.02 billion.

"Hasbro's global team delivered a tremendous 2016. We reached the $5 billion revenue mark for the first time in company history, we improved profitability and we invested to grow Hasbro over the long-term while increasing our dividend and share repurchase levels," said Hasbro Chairman, President and CEO, Brian Goldner. "Hasbro's foresight to build brands led by storytelling, consumer insights and innovation, combined with the relentless execution of our Brand Blueprint including investments in entertainment and digital gaming, is driving our business and creating long-term strategic differentiators for Hasbro."

The company's net earnings for the quarter were $192.7 million, or $1.52 per share. This is up 11.8% from $175.8 million, or $1.39 per share at this time last year. For the full year, Hasbro reported net earnings of $533.2 million.

Hasbro, Inc., maker of countless toys and board games, saw a sharp increase in revenue for the quarter and full-year. While the company reported decreased sales in its Boys and Preschool categories, the Girls category showed a 52% increase in sales for the quarter and a 50% increase for the full year. The company attributes much of that growth to the success of its recent partnership with Disney, namely sales of Disney Princess and Frozen-branded dolls.

Hasbro, Inc. (HAS) shares ended the week at $97.63, up 3.7% for the week.

Whole Foods' Sales Rise While Profits Fall

Whole Foods Market, Inc. (WFM) released its quarterly earnings on Wednesday, February 8. The company reported an increase in sales but a drop in profits.

Sales for the quarter were $4.9 billion. This is an increase of 1.9% over sales of $4.8 billion during the same period last year.

"In this increasingly competitive marketplace, we are committed to taking every step necessary to improve comps and deliver higher returns for our shareholders," said Whole Foods CEO John Mackey. "To this end, we are refining our growth strategy, refocusing our efforts on best serving our core customers and moving faster to fully implement category management. Evolving our purchasing operating model while developing data-rich, customer-centric category management capabilities is critical to our go-forward merchandising, pricing, marketing and affinity strategies."

The company reported net income of $95 million, or $0.30 per share. This is down from $157 million, or $0.47 per share during the prior year's quarter.

While the company's overall sales increased, comparable store sales were down 2.4% from the same quarter last year. The company's reputation for providing high-quality natural and organic food continues to drive sales among its core customer demographic. Despite this customer loyalty, the decline in comparable sales indicates that many consumers are seeking out similar items from lower priced competitors.

Whole Foods Market, Inc. (WFM) shares ended the week at $30.34, up 1.9% for the week.

Goodyear Reports Increased Earnings

The Goodyear Tire & Rubber Company (GT) released its quarterly and full-year earnings on Wednesday, February 8. While sales dropped, profits increased year over year.

The company reported $3.7 billion in sales for the quarter. During the same quarter last year, the company reported sales of $4.1 billion. For the full year, sales were $15.2 billion, a drop of 8% from the prior year.

"We delivered solid net income and record core segment operating income in 2016, driven by strong performance in our Americas and Asia Pacific consumer tire businesses," said Goodyear CEO Richard J. Kramer. "Our results demonstrate continued sustainable earnings growth and disciplined execution of our strategy."

Goodyear's net income for the quarter was $561 million, or $2.14 per share. During the same quarter last year, the company incurred a net loss of $380 million, or $1.42 per share. The company reported full-year net income of $1.26 billion.

The company's profits were hard hit last year by economic instability in Venezuela. Goodyear's fourth quarter net loss last year was due in large part to its deconsolidation of its Venezuela unit. Without that write-off on the books this year, the tire company was able to report a profit that exceeded analysts' expectations.

The Goodyear Tire & Rubber Company (GT) shares ended the week at $33.72, up 5.7% for the week.

The Dow started the week of 2/6 at 20,026 and closed at 20,269 on 2/10. The S&P 500 started the week at 2,294 and closed at 2,316. The NASDAQ started the week at 5,657 and closed at 5,734 for the week.

Tax Reform Talk Buoys Treasury Yields

President Trump announced his intention to push for tax reform in the near future during a meeting with airline executives on Thursday, February 9. Treasury yields, which had fallen in recent weeks, reversed course on Thursday following the president's remarks.

The benchmark 10-year Treasury note bottomed out at 2.33% on Wednesday. During trading on Friday, the 10-year note was at 2.40%.

"Lowering the overall tax burden on American business is big league. That's coming along very well," said President Trump. "We're way ahead of schedule, I believe, and we're going to be announcing something I would say over the next two or three weeks that will be phenomenal in terms of tax and developing our aviation infrastructure."

The president's remarks come at a time when Treasury yields have tapered off following their post-election rise. Now, with a tentative timeline in place for the implementation of new tax policy, many investors appear cautiously optimistic about the economic outlook.

In addition to the surge in Treasury yields, the Dow Jones Industrial Average, S&P 500 and Nasdaq each rose on Thursday. Despite the immediate rally, some experts remain restrained about the economic outlook.

"There is still a lot of uncertainty given that he is so unpredictable," said Charles Comiskey, head of Treasury trading at Scotiabank in New York. "It has been very difficult to trade due to the policy uncertainty."

The 10-year Treasury note yield finished the week of 2/6 at 2.41%, while the 30-year Treasury note yield was 3.01%.

Mortgage Rates Drop Slightly

Freddie Mac released its latest primary mortgage market survey (PMMS) on Thursday, February 9. Mortgage rates remained relatively unchanged for the week, declining by mere basis points.

The 30-year fixed rate mortgage averaged 4.17% this week, down from 4.19% last week. During the same time last year, the 30-year fixed rate mortgage averaged 3.65%.

The 15-year fixed rate mortgage averaged 3.39% for the week. This is down from last week's average of 3.41%. At this time last year, the 15-year fixed rate mortgage averaged 2.95%.

"The 30-year fixed mortgage fell two basis points to 4.17 percent this week," said Freddie Mac Chief Economist Sean Becketti. "Rates are at about the same level at which they started the year and have stayed within a two basis point range over the past three weeks. Mixed economic releases such as Friday's jobs report and uncertainty about the Administration's fiscal policies have contributed to the holding pattern in rates."

Based on published national averages, the money market account finished the week of 2/6 at 0.56%. The 1-year CD finished at 1.22%.

Published February 10, 2017

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