Mattel 2Q profit rises 82 percent on cost-cutting

[July 17, 2009]  EL SEGUNDO, Calif. (AP) -- Toy maker Mattel Inc. said Friday sales of Barbie and other toys sank in the second quarter, but profit rose 82 percent, beating analyst expectations, as the company cut down on expenses.

Profit for the quarter ended June 30 totaled $21.5 million, or 6 cents per share, up from $11.8 million, or 3 cents per share, last year.

Revenue fell 19 percent to $898.2 million from $1.11 billion. The stronger dollar hurt sales by about 5 percentage points. Revenue was also hurt by a lack of toys based on summer entertainment properties, according to CEO Robert A. Eckert.

Analysts polled by Thomson Reuters predicted Mattel would break even on a per share basis on revenue of $969.7 million.

"In light of the challenging global economy, the quarter's results met our expectations," Eckert said

.

U.S. sales fell 12 percent while international sales fell 26 percent, hurt by the stronger dollar.

Mattel girls and boys brands sales, which includes Barbie, High School Musical and Polly Pocket toys, among others, fell 25 percent during the quarter. Sales of Barbie fell 15 percent, mainly due to lower international sales, and sales of Hot Wheels fell 10 percent.

Core Fisher-Price sales fell 13 percent. The American Girl business fared somewhat better, with flat quarterly sales.

Toy makers such as Mattel and rival Hasbro Inc. have been raising prices because of higher commodity costs and cutting expenses and culling inventory due to the weak economy.

Advertising and promotion expenses fell 23 percent at Mattel, while other selling and administrative expenses fell 18 percent.

Hasbro reports second-quarter earnings on Monday.

[Associated Press]

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