Mattel Earnings Up on Cost Cutting
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EL SEGUNDO (AP) _ Mattel Inc., the world’s largest toy maker, said Thursday it exceeded earnings expectations even as worldwide sales slipped 4 percent.
For the three months ended June 30, the company reported net income of $19.6 million, or 4 cents a share, compared with a loss of $4.9 million, or 1 cent a share, in the second quarter of 2001.
Excluding $15 million in pretax charges from closing North American factories and international offices, Mattel said it would have earned $29.6 million, or 7 cents a share.
Analysts had expected earnings, excluding items, of 5 cents a share.
Decreased demand for such key brands as Barbie, Hot Wheels and Fisher-Price, cut revenue to $804.4 million for the quarter, down from $836.2 million for the year-ago period.
Market weakness centered on the United States, where sales declined 7 percent. Internationally, they rose 3 percent, Mattel said.
The company said it offset declining sales with savings from reduced debt and lower inventory.
But investors reacted negatively to the news of falling sales, sending Mattel shares down 20 cents to $18.31 on the New York Stock Exchange.
Sales from the boys-entertainment division declined 5 percent. Sales from the infant and preschool division slipped 6 percent. The girls division held steady from the previous year.
On a conference call with analysts, Robert Eckert, Mattel’s chairman and chief executive, said the company’s long-term guidance remains unchanged.
Revenue is expected to grow in the mid-single-digit percentage range and earnings per share growth should be in the low double-digits to mid-teens range.