UPDATE 2-RC2 posts lackluster Q1 results; cuts 2008 profit view
(Adds analysts' comments)
By Dhanya Skariachan
BANGALORE, April 22 (Reuters) - Toymaker RC2 Corp RCRC.O, plagued with product recalls, posted a lower-than-expected quarterly profit, hurt by a decline in product sales amid a sluggish retail environment, and cut its 2008 earnings outlook, sending its shares down 10 percent.
The orders from RC2's retailer customers have been conservative in the first quarter, Robert Baird analyst David Cumberland said from Chicago. RC2's customers include Wal-Mart (WMT.N: Quotazione), Target (TGT.N: Quotazione) and Toys R Us.
The lackluster results come a month after the U.S. Senate approved a bill to crack down on dangerous consumer products following a year of recalls of millions of lead-tainted toys and other hazardous products by Mattel Inc MAT.N, RC2 and other toy companies.
RC2 stock has fallen nearly 51 percent in the past year, while the wider S&P 1500 Leisure Equipment & Products Industry Index .15GSPLEP slid nearly 24 percent.
The toymaker, based in Oak Brook, Illinois, posted a first-quarter net profit of $2.0 million, or 11 cents a share, compared with $8.1 million, or 37 cents a share, a year ago.
The results were hurt by recall-related costs of $1.5 million, or 5 cents a share.
RC2's net sales fell 17 percent to $93.3 million. Continua...