Ignoring the Noise: A Focused Look at LeapFrog Enterprises, Inc. (LF) Earnings

Management and new markets
A intangible quality that I like to see is the attitude of the management on the call, and is also a reason I like to listen, and not only read a transcript. In Leap Frog’s case, the CEO John Barbour was full of emotion on the call, and spoke passionately about the company’s future. While this should never be an investor’s sole reason for investing, I’d rather have a passionate CEO than one with a Ben Stein persona.

A large opportunity for LeapFrog going forward is developing products for different languages and countries, with sales increasing 38% abroad compared to 24% at home. The company has seen good results in the U.K., and has now entered France and French-speaking Canada. As LeapFrog expands into new markets and languages, it should provide for great growth opportunities. This is an area for investors to watch as the company begins sales abroad.

Final Thoughts
While it was great to see the products selling, and continued market expansion, my main takeaway was the company’s new focused vision — multimedia. The CEO was very clear about how, over the past two years, they’ve been transitioning from an educational toy company to an educational multimedia company. With a newly-focused company strategy, an established brand, untapped international opportunities, and several new markets, I’d say the odds are stacked in LeapFrog’s favor. My only worry isn’t the decline of the more traditional toy offerings; it’s the possibility of a lingering Hasbro, Inc. (NASDAQ:HAS) or Mattel, Inc. (NASDAQ:MAT) buying them before investors and myself get to participate in the ongoing LeapFrog story.

The article Ignoring the Noise: A Focused Look at Leap Frog Earnings originally appeared on Fool.com and is written by Blake Bos.

Blake Bos owns shares of LeapFrog Enterprises. The Motley Fool recommends LeapFrog Enterprises. The Motley Fool owns shares of LeapFrog Enterprises.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.