Jakks Cuts 15% of Staff; Quarterly Profit Rises
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Jakks Pacific Inc. reported quarterly profit in line with estimates but said it fired 48 employees, or 15% of its work force, in anticipation of weakness ahead.
Shares of the Malibu-based toy maker dropped $1.83, or 12%, to $12.97 on Nasdaq.
Jakks, whose products include World Wresting Entertainment action figures, said second-quarter net income rose 14% to $7.83 million, or 36 cents a share, from $6.87 million, or 36 cents, a year earlier. Sales rose 13% to $79 million.
Excluding costs for a voluntary recall, profit was $8.9 million, or 41 cents, a penny better than the average estimate of analysts polled by Thomson First Call.
Jakks cut its full-year profit forecast to a range of $1.64 to $1.70 a share, from its previous guidance of $1.80 to $1.92, in anticipation of lower sales as retailers continue to trim inventory.
The company said it expected to save $3 million a year from the staff reduction and other cuts in expenses.
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