Mattel Third-Quarter Earnings Jump 22 Percent Despite Lower 'Cars 2' Toy Sales
Toy giant Mattel on Tuesday reported third-quarter earnings that rose 22 percent and exceeded Wall Street estimates, with entertainment properties and the acquisition of kids TV firm HIT Entertainment once again contributing to the results.
The company recorded earnings of $365.9 million, or $1.04 per share, up from $300.8 million, or 86 cents a share, in the year-ago period.
The company posted revenue of $2.08 billion, up 4 percent from the year-ago period and in line with analyst projections.
An unfavorable change in currency exchange rates was a slight drag on the figures.
Third-quarter sales rose 6 percent in North America.
Worldwide Barbie sales fell 4 percent. Worldwide sales for the firm's entertainment business were down 18 percent, primarily driven by decreases in the Cars 2 movie property. Other key brands posted gains.
Worldwide sales for Fisher-Price Brands rose 6 percent, "driven by strength in Fisher-Price Friends with the addition of the HIT Entertainment portfolio and Disney's Jake and the Never Land Pirates property," the company said.
The company's Disney Princess toys have also contributed to Mattel's results in recent quarters.
“We are pleased with our performance in the third quarter as it represents another quarter of building momentum in the marketplace through share gains and strong shipments across our portfolio of brands and countries,” said Mattel CEO Bryan Stockton. "That said, with the holidays still in front of us, we remain focused on executing our business and driving retail sales in the all-important holiday season.”
MKM Partners analyst Eric Handler recently said he has been "growing more positive towards Mattel," but has stayed away from upgrading the stock to a "buy." He cited a still-sluggish toy market, which has seen a U.S. sales decline of 7 percent through August and a slight decline in Europe.