Higher Mattel Quarter Still Disappoints

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Shares of Mattel Inc. fell more than 9 percent Friday after the toymaker reported a smaller-than-expected second quarter profit despite strong sales.

The El Segundo company reported a net income of $51.6 million (14 cents per share), compared with $21.5 million (6 cents) a year earlier. While profit more than doubled, the per-share results missed by a penny the average expectations of analysts surveyed by Thomson Reuters.

Revenue was in line with Wall Street forecasts, up 13 percent to $1.02 billion. Sales rose 17 percent in the United States and 9 percent overseas, the latter gain dampened by a poor exchange rate for the euro.

Cost cutting enabled the company to slice $12 million off expenses, but general expenses overall were still up 12 percent due to higher severance and advertising costs.

Sales rose 11 percent for Hot Wheels, 6 percent for Barbie and 4 percent for Fisher-Price toys, but were down 4 percent for the company’s American Girl line. Entertainment division revenue soared 60 percent, boosted by “Toy Story 3” toys and a new line of World Wrestling Entertainment action figures and toys.

“I am pleased with the continued solid performance across our portfolio of brands and countries, particularly Barbie and Hot Wheels, as well as the stellar contribution of the much-anticipated Toy Story 3 property,” Chief Executive Robert A. Eckert said in a statement.

Shares closed down $2.19, or 9.5 percent, to $20.81 on the Nasdaq.

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