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Mattel shares rise as Q1 results top views; profit surges

Published: 14:08 17 Apr 2013 BST

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Shares of Mattel (NASDAQ:MAT) were higher in premarket hours Wednesday, after the toy maker reported first quarter results that topped analysts’ expectations thanks to sales growth led by its American Girl merchandise.

The company, which makes Hot Wheels, Polly Pocket and Barbie, said first quarter net earnings shot up to $38.5 million or 11 cents per share, compared to $7.8 million or two cents per share, a year earlier. 

Revenue grew seven per cent to $995.6 million from $928.4 million in the year-ago period.

Analysts polled by Thomson Reuters expected per share earnings of nine cents, on revenue of $985.79 million for the period that ended March 31.

“Overall, 2013 is off to a solid start, demonstrating the strength of our global portfolio of brands, countries and customers,” said chairman and CEO Bryan G. Stockton.

“We are very pleased with the performance of our Girls portfolio and the strong results across all regions, particularly Europe. We continue to see the first quarter as our pre-season and we remain focused on a strong 2013 and delivering in the all-important holiday season.” 

On a regional basis, the company said revenue rose five per cent in North America, while sales overseas grew by nine per cent.

The company's Mattel Girls & Boys brands posted $692.2 million in sales, an increase of 11 per cent. 

In this unit, global Barbie sales fell two per cent, while sales for the Wheels brands, which includes Hot Wheels, Matchbox and Tyco R/C, also slipped two per cent. 

Worldwide sales for Fisher-Price products fell seven per cent to $287.3 million, while Mattel's American Girl brand sales popped 32 per cent to $100.5 million. 

Gross margin widened to 54.2 per cent from 51 per cent, while cost of sales, which includes the cost of the materials used in making the products and the direct labor costs involved, was relatively flat year-over-year at $455.6 million.

Mattel employs around 28,000 people in 40 countries and territories and sells products in more than 150 nations.

The company also declared a second quarter cash dividend of 36 cents per share on Wednesday, payable on June 14 to stockholders of record on May 23. 

During the first quarter, Mattel repurchased 240,000 shares of its common stock at a cost of about $9 million.

Shares of the company rose 4.23 per cent in premarket hours, lately at $44.80.

 

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