Shares of Hasbro ( HAS) fell almost 7% Thursday after the toymaker reported earnings that were below expectations. Some analysts said the reaction was overdone. Hasbro posted a fourth-quarter profit of $52.5 million, or 30 cents a share, reversing a loss of $180.1 million, or $1.05 a share, from a year ago. The consensus called for earnings of 37 cents per share. Because of the miss, the toy maker's stock fell $1.04, or 6.8%, to $14.35. The 2001 results included a one-time loss of $11.3 million, or 7 cents per share, related to the deteriorating business environment and the impact of the peso devaluation in Argentina. "Excluding the impact from Argentina, Hasbro's earnings were in line with expectations," said Hayley Kissel, an analyst at Merrill Lynch, who thinks the impact from Argentina is related to a change in business strategy there rather than a result of bad-debt exposure. Among some of the positive aspects in Hasbro's earnings report, analysts said, were a reduction in debt -- the toymaker ended the year with debt net of cash down $300 million -- and a decline in costs. The company said its operating costs fell 27% for the year to $1.2 billion. And the toy manufacturer said it reduced its inventory level by 35% to $217.5 million in 2001. Revenue in the fourth quarter fell 17.6% to $988.7 million, largely as a result of lower sales in the Pokemon, Furby and Hasbro Interactive units. Excluding those toy lines, revenue increased 5%. "We are making the right moves to make Hasbro leaner and more consistently profitable for our shareholders," said Alan Hassenfeld, chief executive, in a statement. "We are pleased with achieving full-year profitability in a difficult retail environment." For the year, Hasbro earned $59.7 million, or 35 cents per diluted share, excluding items. In the year-ago period, the company lost $144.6 million, or 82 cents per diluted share, including items. In justifying the market's response, some analysts said Wall Street was expecting more. "Because Hasbro had the 'must-have' toys during a good Christmas season," -- such as the Monsters, Inc. line -- "the numbers probably disappointed people who were expecting better," said Felicia Kantor, an analyst at Lehman Brothers. Going forward, Hasbro hopes its business grows 3% to 5% a year. And while the company says it's realistic about the economic environment, it hopes to return operating margins to 10% to 11% by 2003.