Ahead of the Bell: Jakks Pacific slumps

NEW YORK (AP) -- Shares of Jakks Pacific plunged in premarket trading Thursday after the toymaker reported disappointing quarterly results, slashed its outlook and announced a restructuring.

The Malibu, Calif., company said sales fell short as retailers in the U.S. and Europe reduced their orders and key brands such as Monsuno and Winx Club did poorly. Jakks Pacific blamed unusually cool weather, as well as children's growing preference for games played on mobile devices.

Jakks Pacific said it now plans a heavier emphasis on digital toys. Additionally, it will reduce jobs and overhead expenses, although it did not provide specifics. It is also suspending its quarterly dividend of 7 cents per share, a move expected to save an estimated $6.2 million annually.

The company expects a loss for this year and a return to profitability next year. Analysts surveyed by FactSet had forecast earnings per share of 45 cents for 2013 and 68 cents for 2014.

KeyBanc analyst Scott Hamann lowered his estimates for 2013 and 2014, and maintained his "Hold" rating on the stock, noting that Jakks Pacific remains in "transition."

"We believe that while the toy industry in (the first half of 2013) was somewhat weak relative to expectations, the magnitude of the sales miss represents more of a structural issue in JAKK's product portfolio as it works to enhance its core evergreen franchises," the analyst wrote in a note.

In premarket trading, shares lost nearly 25 percent, or $2.82, at $8.66. Over the past year, shares have traded between $9.46 and $16.70.