Mattel Inc. Earnings Cheat Sheet: Profit Rises for Second Straight Quarter

S&P 500 (NYSE:SPY) component Mattel Inc. (NASDAQ:MAT) reported its results for the third quarter. Mattel designs and manufactures a variety of toys and games for customers and consumers worldwide.

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Mattel Earnings Cheat Sheet for the Third Quarter

Results: Net income for the toys and games company rose to $300.8 million (86 cents per share) vs. $283.3 million (77 cents per share) in the same quarter a year earlier. This marks a rise of 6.2% from the year earlier quarter.

Revenue: Rose 9% to $2 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MAT fell in line with the mean analyst estimate of 86 cents per share. Analysts were expecting revenue of $1.97 billion.

Quoting Management: “We continue to be pleased with our performance across our portfolio of brands in all of the regions of the world. Not only have we continued to benefit from the strength of our core brands, but this year’s big entertainment property, CARS two, is also fueling momentum,” said Robert A. Eckert, chairman and chief executive officer of Mattel. “As we enter into the all-important holiday season, we remain keenly focused on execution and delivering growth in our core brands, working to expand and leverage our international footprint, optimizing our entertainment portfolio, and building our newest franchise, Monster High.”

Key Stats:

Gross margin shrank 3.3 percentage points to 47.8%. The contraction appeared to be driven by increased costs, which rose 16.4% from the year earlier quarter while revenue rose 9%.

Revenue has risen the past four quarters. Revenue increased 14.1% to $1.16 billion in the second quarter. The figure rose 8.2% in the first quarter from the year earlier and climbed 8.7% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell in line with estimates last quarter after beating forecasts in the previous quarter with net income of 23 cents versus a mean estimate of net income of 16 cents per share.

The company has now been profitable for the last nine quarters, and for the last five, profit has risen year over year by an average of 10.3%. The quarter with the biggest boost was the second, which saw a 56.1% surge.

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 $1.02 a share to $1.01 over the last ninety days. Over the past three months, the average estimate for the fiscal year has climbed from $2.07 per to share to $2.14.

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).

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(Source: Xignite Financials)