(Adds additional details from conference call, updates share price.)

Hasbro Inc.'s (HAS) second-quarter earnings rose 4.8% amid strong sales of most of its toy brands, including those related to the Transformers movie sequel, but revenue fell just short of Wall Street's expectations while profit topped estimates.

Meanwhile, the toy maker said its TV network and Web site joint venture with Discovery Communications Inc. (DISCA) won't hurt earnings as much as previously expected. President and Chief Executive Brian Goldner reiterated Hasbro's long-stated target of growing 2009 revenue and per-share earnings - despite a 15 to 20 cents a share hit from the television investment and assuming no major deterioration in the global economy or in the value of foreign currencies.

Hasbro in April unveiled a pricey joint venture that will give it shared control with Discovery of a new cable-TV network and Web site for children based on Hasbro brands and the Discovery Kids network.

Hasbro at the time said it expected the joint venture to hurt 2009 earnings by 25 to 30 cents a share, but lower financing costs and amortization of expenses tied to the deal prompted the revision. The Pawtucket, R.I., company expects the deal to hurt 2010 earnings by 25 to 30 cents a share, down from previous guidance of 30 to 35 cents a share.

For the second quarter, Hasbro reported a profit of $39.3 million, or 26 cents a share, up from $37.5 million, or 25 cents a share, a year earlier. The latest period included a 6-cent charge related to the Discovery joint venture.

Revenue increased 1% to $792.2 million, but rose 7% in constant currency.

Analysts polled by Thomson Reuters most recently were looking for earnings of 23 cents on revenue of $797 million.

Gross margin fell to 59.7% from 60.7%.

Shares recently gained 3.5% to $26.26. The stock is down by roughly a third in the past year.

Toy makers' sales had slumped in recent quarters as consumers spend less and a rebound isn't seen anytime soon. For its part, Hasbro is placing its hopes on toys tied to the smash "Transformers: Revenge of the Fallen" to boost sales. Much of Hasbro's recent growth stems from its success featuring its toys in hit movies as its lineup includes G.I. Joe, Star Wars and Spider-Man products. A G.I. Joe movie is coming up next month.

Hasbro executives said during a conference call that Transformers products so far are selling better at retail than they did following the 2007 movie, yet they expect stronger contributions to company sales in the third and fourth quarters. "We couldn't be more pleased with the performance at the box office and retail," Goldner said.

Hasbro began shipping toys tied to the G.I. Joe movie in the second quarter, and it is seeing great placement at retailers globally, management added.

Point-of-sale data showed retail sales of Hasbro's products were higher in the second quarter, and retailer inventories are a little higher than a year ago, executives said.

"Overall, our retailers are supporting the brands that are selling," Goldner said.

Chief Operating Officer David Hargreaves said Hasbro doesn't expect it will be impacted by some retailers' moves to cut back on shelf space devoted to toys. Rather, smaller toy makers and those with less well known brands or entertainment tie-ins are likely to be hit harder, he said.

And while some consumer product categories are seeing increased penetration by private label brands, retailers are showing slightly more demand for branded toys and toys tied to entertainment, he said.

"They want to place bets with great brands," Goldner said.

Rival Mattel Inc. (MAT) on Friday reported another quarter of slumping sales, partly attributing it to lack of toys tied to summer entertainment, though its bottom line benefited from cost cuts.

In Hasbro's U.S. and Canadian segment, sales rose 4.8%. International sales declined 9.9%, hurt by foreign currency effects.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; tess.stynes@dowjones.com

(Mary Ellen Lloyd contributed to this report.)