* Q2 EPS 33 cents vs Street view 23 cents
* Sales fall, miss expectations
* Working with retailers to align toy shipments with demand
* Shares rise 5 pct in early trading
By Dhanya Skariachan
July 23 (Reuters) - Hasbro Inc, the second-largest U.S. toymaker, topped Wall Street's profit expectations for the first time in six quarters due to better inventory management and market share gains, sending its shares up 5 percent on Monday.
The company, home to brands such as Monopoly, G.I. Joe, Nerf and Mr. Potato Head, said it had managed to cut inventory levels in the first two quarters of the year, and was working with U.S. retailers to shift toy deliveries closer to the peak consumer demand periods in the third and fourth quarters.
It now expects 2 percent to 4 percent more of its full-year revenue to be made in the second half of the year.
The news comes as toy companies prepare for the all-important holiday selling season, when many of them make more than one-third of their annual sales.
Like many companies, Hasbro was hurt at holiday time last year when demand in the United States and Canada tapered off after a strong start.
Hasbro, which counts retailers Wal-Mart Stores Inc, Target Corp and Toys R Us Inc as its top customers, said second-quarter net profit fell to $43.4 million, or 33 cents a share, from $58 million, or 42 cents a share, a year earlier.
Analysts on average were expecting 23 cents a share, according to Thomson Reuters I/B/E/S.
"In the U.S. and Canada, we have gained (market) share and the teams are focused on returning to historical levels of operating profit," CEO Brian Goldner said in a statement.
Hasbro was on track to achieve that goal, Goldner added on a conference call.
Stifel analyst Drew Crum pointed out that Hasbro's gross margin of 61.6 percent was above his estimate of 59.4 percent, calling it a "similar surprise to what Mattel showed."
Last week, Mattel Inc also beat Wall Street profit expectations by keeping a tight lid on costs.
The toy makers join other U.S. companies that have been working hard to improve productivity and cut costs to combat lackluster sales both at home and in Europe.
Hasbro's sales missed analysts' expectations due to weakness in key markets such as the United States and Canada. Total sales fell 11 percent to $811.5 million, while analysts had expected $828.6 million. Revenue at its U.S. and Canada segment fell 19 percent to $406.6 million.
A stronger dollar also hurt the toymaker.
Hasbro reiterated its outlook for the year on Monday. It expects revenue and earnings per share to increase in 2012, excluding the impact of foreign exchange.
Hasbro's shares rose $1.72, or about 5 percent, to $34.54 in early Nasdaq trading.