We are upgrading our recommendation on RC2 Corp. (RCRC) to Neutral from Underperform.   RC2’s fourth-quarter earnings of 43 cents per share was ahead of the Zacks Consensus Estimate of 41 cents. The better-than-expected results were driven by a favorable product mix and higher margins reflecting cost-reduction initiatives. However, the results were flat compared to the prior-year period.   We expect RC2 to further benefit from its aggressive acquisition strategy and the cost cut drives. The company’s focus on core early childhood demographic factors bodes well. It markets its products to new mothers which represent a steady and renewable customer base.   Though RC2’s overall sales and profit are anticipated to be lower in the first half of 2010 compared to the prior-year period due to the transition in its preschool, youth and adult products category, we believe that the company stands to benefit from product launches such ...

RC2 Corp.’s (RCRC) fourth quarter earnings of 43 cents per share were ahead of the Zacks Consensus Estimate of 41 cents. The better-than-expected results were driven by a favorable product mix and higher margins reflecting the cost-reduction initiatives. Results were flat compared to the prior-year period. However, the company’s outlook for 2010 is below our expectations.  Including the non-cash impairment charge related to the Sesame Street infant and toddler products license, which is not being renewed after 2010, the company reported a net income of $8.3 million or 38 cents per share, compared with a year-ago loss of $212.4 million or $12.32. In the year-ago quarter, the company incurred significant charges including non-cash impairment and write-down charges, severance and other related costs.  For full year 2009, RC2 reported net income of $27 million or $1.39 per share, compared with a loss of $205.8 million or $11.82 ...

RC2 Corp. (RCRC) has agreed to pay $1.25 million civil penalty for violation of the federal lead paint ban, as announced by the U.S. Consumer Product Safety Commission (CPSC) recently.   The CPSC had alleged that RC2 Corp. and one of its wholly owned subsidiaries, Learning Curve Brands Inc, imported and sold Thomas & Friends Wooden Railway toys that had lead levels exceeding the legal limits. However, RC2 Corp. denied of any deliberate violation.   High levels of lead in paints or surface coatings of toys and other articles for children result in lead poisoning and affect their health. According to the 1978 federal lead paint ban, toys and other children's articles are prohibited from having more than 0.06% of lead (by weight) in paints or surface coatings. However, the regulatory limit was reduced to 0.009% on Aug 14, 2009, as a result of the Consumer Product Safety ...

RC2 Corporation’s (RCRC) third quarter earnings of 66 cents per share are ahead of the Zacks Consensus Estimate of 60 cents. Results were driven by cost reduction initiatives implemented by the company though sales reported a drop in the quarter. Net sales were down 4.8% year-over-year to $126.5 million. Sales were reduced by 3% due to unfavorable fluctuations in foreign currency exchange rates. Slightly better results in North America were offset by weak International sales. Foreign currency exchange rates had a negative impact on International sales. Sales in mother, infant and toddler products category decreased 5% year-over-year, driven by lower sales in health/safety and infant toy product lines. Management expects growth in this category in 2010. Sales in preschool, youth and adult products category decreased 5% year-over-year. However, this decline was low when compared with the 15% year-over-year decline in the first half of 2009. ...

RC2 Corp.’s (RCRC) MACD indicator has entered into bearish territory with a reading of -0.2114. The Zacks #4 Rank (“Sell") stock has declined nearly 2% to $14.48 in afternoon trade. The full-year Zacks Consensus Estimate has moved down by 8 cents over the past 2 months to $1.32 per share."RCRC" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research