DOW JONES NEWSWIRES
Mattel Inc. (MAT) on Friday reported its second-quarter earnings
soared 82% on lower costs and non-operating income, though sales
slid a bigger-than-expected 19% as consumers cut spending and
retailers curb their inventories.
Chairman and Chief Executive Robert A. Eckert said the results
met the company's expectations amid the recession, and revenues
were largely impacted by a lack of toys tied to summer
entertainment. In Mattel's entertainment business, which includes
games and puzzles, sales were down 32%.
The toy maker is coming off a first-quarter loss and last year's
miserable holiday sales season. In response, Mattel has been
cutting costs and implemented price hikes at the start of 2009.
Mattel reported a profit of $21.5 million, or 6 cents a share,
up from $11.8 million, or 3 cents a share, a year earlier. Revenue
decreased 19% to $898.2 million, with currency exchange accounting
for five percentage points of the decline.
Analysts polled by Thomson Reuters most recently were looking
for break-even results on revenue of $970 million.
Gross margin rose to 45.2% from 44.5% amid falling costs. In
addition, marketing costs dropped 23% and interest costs tumbled
65%.
The bottom line was also boosted by $6.3 million of
non-operating income, while the prior year had $6.4 million of such
costs. Details weren't disclosed by Mattel in its press
release.
Mattels' sales fell 26% internationally, with exchange rates
accounting for 10 percentage points of the decline. Sales dropped
12% in North America.
In other segments, Barbie sales declined 15%, mostly on
international weakness while its car business saw a 10% drop and
Fisher-Price fell 13%.
Shares closed at $16.19 on Thursday and didn't trade premarket.
The stock is up 56% since hitting a nine-year low in March.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com
