UPDATE 1-LeapFrog posts wider Q4 loss

Mon Mar 2, 2009 4:42pm EST

Related Topics

* Q4 loss 70 cents/shr vs. estimate loss 21 cents

* Lower shipments seen in 1st half (Adds sales, gross margin)

ATLANTA, March 2 (Reuters) - Education toymaker LeapFrog Enterprises Inc (LF.N) posted a bigger-than-expected quarterly loss on Monday as sales fell and it marked down prices.

The company said it expects lower shipment levels in the first half because of left-over inventory from the just-completed quarter and the weak economy.

LeapFrog's net loss widened to $44.3 million, or 70 cents a share, for the fourth quarter, from $32.6 million, or 51 cents a share, a year earlier.

Analysts expected a loss of 21 cents a share, on average, according to Reuters Estimates.

Sales fell 24 percent to $137.8 million.

Gross margins shrank to 34.9 percent from 37.2 percent a year earlier, hurt by factors including discounting that accelerated during the holiday season.

In November, LeapFrog said it would cut 70 jobs to lower costs amid the spreading economic downturn. It had expected the layoffs to be completed in the first quarter of 2009, and had also planned to consolidate its headquarters operations.

Toy companies, usually considered more resistant to consumer cutbacks in a recession, face a tough time as job losses, tighter credit and weak home values push shoppers to sacrifice toys for their children. (Reporting by Karen Jacobs and Aarthi Sivaraman in New York; editing by Jeffrey Benkoe )

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