Mattel’s Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Mattel (NASDAQ:MAT) will unveil its latest earnings on Tuesday, July 17, 2012. Mattel designs and manufactures a variety of toys and games for customers and consumers worldwide.

Mattel Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 21 cents per share, a decline of 8.7% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 22 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 21 cents during the last month. Analysts are projecting profit to rise by 9.6% versus last year to $2.39.

Past Earnings Performance: The company fell short of estimates last quarter after topping forecasts the quarter prior. In the first quarter, it reported net income of 6 cents per share against a mean estimate of 7 cents. Two quarters ago, it beat expectations by 6 cents with profit of $1.07.

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A Look Back: In the first quarter, profit fell 52.9% to $7.8 million (2 cents a share) from $16.6 million (5 cents a share) the year earlier, missing analyst expectations. Revenue fell 2.5% to $928.4 million from $951.9 million.

Stock Price Performance: Between July 5, 2012 and July 11, 2012, the stock price dropped $1.39 (-4.2%), from $32.82 to $31.43. The stock price saw one of its best stretches over the last year between April 23, 2012 and May 2, 2012, when shares rose for eight straight days, increasing 6.5% (+$2.06) over that span. It saw one of its worst periods between May 2, 2012 and May 9, 2012 when shares fell for six straight days, dropping 5.3% (-$1.78) over that span.

Wall St. Revenue Expectations: Analysts are projecting a decline of 2.6% in revenue from the year-earlier quarter to $1.13 billion.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 14.1% in the second quarter of the last fiscal year, 9% in the third quarter of the last fiscal year and 1.4%in the fourth quarter of the last fiscal year before dropping in the first quarter.

The company is looking to get back on track with this earnings announcement after a profit drop last quarter snapped a positive string of results. Net income rose 56.1% in the second quarter of the last fiscal year, 6.2% in the third quarter of the last fiscal year and 14% in the fourth quarter of the last fiscal year before declining in the first quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.21 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 3.31 in the fourth quarter of the last fiscal year to the last quarter driven in part by a decrease in current assets. Current assets decreased 27.3% to $2.5 billion while liabilities rose by 9.1% to $1.13 billion.

Analyst Ratings: With nine analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

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

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