PAWTUCKET – Hasbro Inc. (NYSE: HAS) today posted a second-quarter profit of $37.49 million, or 7.8 times the year-ago period’s $4.80 million, on revenue that increased 13.4 percent to $784.29 million worldwide.

Excluding gains from favorable foreign exchange rates, second-quarter revenue rose about 10 percent, Hasbro said. Earnings per diluted share rose to 25 cents in the fiscal quarter ended June 29, from 3 cents in the 2007 second quarter.

“We are very pleased with our second-quarter and first-half performance,” Brian Goldner, who on May 22 took over from Alfred J. Verrecchia as Hasbro’s president and CEO (READ MORE), said in a statement this morning.

“The current strength of our product line is allowing us to invest in our future growth – by developing our business in emerging markets, in entertainment and in digital gaming – while continuing to deliver strong earnings.”

The results exceeded expectations, based on a Bloomberg News survey of 10 analysts, whose median forecasts called for a profit of 22 cents per share.

Hasbro’s results for the 2007 second quarter included a one-time pre-tax charge of $36.5 million related to the company’s repurchase of all outstanding warrants for Hasbro stock held by Lucasfilm Ltd. and Lucas Licensing Ltd. (READ MORE) Compared with the year-ago results excluding that transaction – which would have brought Hasbro’s year-ago net income to about $41.3 million – the company’s second-quarter profit fell 9.2 percent.

By comparison, rival Mattel Inc. Friday posted a 48-percent decline in second-quarter profit to $11.8 million, or 3 cents per diluted share, on sales that rose 11 percent year-over-year to $1.11 billion. The El Segundo, Calif.-based toymaker cited legal costs related to its lawsuit against MGA Entertainment Inc. over the origin of the Bratz dolls – in which Mattel scored a partial victory on Friday – and its 2007 Chinese toy recall. Strong sales of Batman toys helped boost earnings beyond the 2 cents per share analysts had expected, Bloomberg News said.

Highlights of Hasbro’s second quarter – aside from the leadership transition in May, when former President and CEO Verrecchia became chairman, taking over for Alan Hassenfeld – included Hasbro’s $80 million purchase of all intellectual-property rights to the Trivial Pursuit brand, which the toymaker has been developing and selling since 1983 under license from the Horn Abbot companies (READ MORE). The quarter also saw a $500,000 donation to the Bradley Hospital expansion by the company’s philanthropic arm, the Hasbro Children’s Fund. (READ MORE).

Sales in the company’s North American segment increased 10.9 percent to $467.66 million, led by increases in the Indiana Jones, Star Wars and Marvel Entertainment Inc. product lines; as well as the Nerf, G.I. Joe and Easy-Bake Oven lines; and board-game brands including Monopoly and Trivial Pursuit. The segment’s second-quarter operating profit rose to $43.69 million, a 22.9-percent increase from a year-ago total of $35.45 million that included a $10.4 million charge related to the Easy-Bake recall.

International segment sales grew 15 percent to $293.69 million, reflecting increased sales of brands led by Littlest Pet Shop, Playskool and Furreal Friends; various board games; Indiana Jones and Star Wars products; and about $23.4 million in gains from foreign exchange. The Transformers and Marvel lines also remained strong, Hasbro said. The international segment posted an operating profit of $13.98 million, an 8.9-percent decline from the year-ago period’s $15.35 million. The company cited “the investment spending in emerging markets.”

“I’m very pleased with the earnings we announced today,” David Hargreaves, Hasbro’s executive vice president and chief financial officer, said in a statement. “While input cost inflation continues to be challenging, thus far, we have been able to mitigate most of the impact through cost-savings initiatives and pricing actions.”

During the quarter, the company spent $51.6 million to buy back nearly 1.65 million shares of common stock at an average cost of $31.36 per share. At the period’s end, $402.2 million remained in Hasbro’s current share-repurchase authorization.

“Even though Hasbro has made tremendous strides in diversifying away from big movie-franchise toys, there’s no doubt right now they’re really being driven by that,” Chris White, an analyst at Wedbush Morgan Securities, told Bloomberg News. But “all toymakers are moving into digital entertainment,” he added, and in that field, “Hasbro is a bit ahead of the curve.”

Hasbro Inc. (NYSE: HAS) is a world leader in the design, manufacture and marketing of traditional and high-tech games and toys under brands including Playskool, Tonka, Milton Bradley, Parker Brothers, Tiger and Wizards of the Coast. Additional information is available at www.hasbro.com.