2 Stocks Warm on Trading Terminals as Earnings are Digested

Mattel Inc. (NASDAQ:MAT) reported net income above Wall Street’s expectations for the fourth quarter. Net income for the toys and games company rose to $370.6 million ($1.07 per share) vs. $325.2 million (89 cents per share) in the same quarter a year earlier. This marks a rise of 14% from the year earlier quarter. Revenue rose 1.4% to $2.15 billion from the year earlier quarter. MAT beat the mean analyst estimate of $1.01 per share. It fell short of the average revenue estimate of $2.23 billion.

“Mattel delivered another strong year, our third consecutive year of solid performance, which I am especially pleased about given the soft global economic backdrop and the highly promotional environment, particularly in the U.S.,” said Bryan G. Stockton, Mattel Chief Executive Officer. “Despite these challenges, for the year we delivered strong revenue growth and record operating income. Our portfolio of brands performed around the globe; our point-of-sale grew nicely; and we gained category share according to NPD’s most recent data. In fact, four of the top five properties for the 2011 holiday season were Mattel properties.”

Competitors to Watch: JAKKS Pacific, Inc. (NASDAQ:JAKK), Hasbro, Inc. (NYSE:HAS), Kid Brands Inc (NYSE:KID), LeapFrog Enterprises, Inc. (NYSE:LF), and Casdon plc (AMEX:CDY).

Avery Dennison Corporation (NYSE:AVY) reported its results for the fourth quarter. Net income for the paper company fell to $22.2 million (21 cents per share) vs. $114.2 million ($1.06 per share) a year earlier. This is a decline of 80.6% from the year earlier quarter. Revenue fell 0.5% to $1.45 billion from the year earlier quarter. AVY reported adjusted net income of 36 cents per share. By that measure, the company fell short of mean estimate of 46 cents per share. It fell short of the average revenue estimate of $1.6 billion.

“Despite the challenges of softening volumes and inflation in 2011, we increased operating income before restructuring costs, and generated nearly $300 million of free cash flow,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “Our employees did an outstanding job of meeting this year’s challenges with a strong focus on pricing, productivity, and working capital, and I want to thank them for their discipline and dedication. “We also announced earlier this month an agreement to sell our Office and Consumer Products business, consistent with our strategy to maximize its value for shareholders,” Scarborough said. “For 2012, although the economic environment remains uncertain, we expect improved earnings, solid free cash flow, and increased return of cash to shareholders.”

Competitors to Watch: MeadWestvaco Corp. (NYSE:MWV), Smurfit-Stone Container Corp. (NYSE:SSCC), Bemis Company, Inc. (NYSE:BMS), Verso Paper Corp. (NYSE:VRS), ACCO Brands Corporation (NYSE:ABD).

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com