Mattel Earnings: Margin Expansion Driven by Falling Costs, Profit Rises

S&P 500 (NYSE:SPY) component Mattel Inc. (NASDAQ:MAT) reported net income above Wall Street’s expectations for the third quarter. Mattel designs and manufactures a variety of toys and games for customers and consumers worldwide.

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Mattel Inc. Earnings Cheat Sheet

Results: Net income for Mattel Inc. rose to $365.9 million ($1.04 per share) vs. $300.8 million (86 cents per share) in the same quarter a year earlier. This marks a rise of 21.6% from the year-earlier quarter.

Revenue: Rose 4% to $2.08 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Mattel Inc. beat the mean analyst estimate of 98 cents per share. It beat the average revenue estimate of $1.13 billion.

Quoting Management: “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 Bryan G. Stockton, Mattel chief executive officer. “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.”

Key Stats:

Last quarter’s year-over-year revenue increase breaks a two-quarter streak of revenue declines. Revenue fell 0.3% in the second quarter and fell 2.5% in the first quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 28 cents versus a mean estimate of net income of 21 cents per share.

Net income has increased 1.7% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 21.6% from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $1.15 a share to $1.14 over the last thirty days. At $2.44 per share, the average estimate for the fiscal year has risen over the past seven days from $2.37.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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