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Mattel (MAT) on Oct. 16 tickled investors with news that its earnings rose during the third quarter, thanks to products such as the hot new T.M.X. Elmo toy and signs that the Barbie business is stabilizing.
The El Segundo (Calif.)-based company had net income during the three months ended Sept. 30 of $239.0 million, or 62 cents per share, compared to last year's third quarter net income of $225.3 million, or 55 cents per share. The mean analyst estimate had been 61 cents per share, according to the San Francisco research firm StarMine.
Mattel's net sales rose to $1.79 billion, up 7% compared to $1.67 billion last year, including a favorable change in currency exchange rates of 1 percentage point.
"We had good performance across our portfolio," said Robert A. Eckert, chairman and chief executive officer of Mattel, in a press release. Eckert said strong contibutions came from Fisher-Price, items tied to the Pixar film Cars, and girls' brands such as Polly Pocket and Pixel Chix. He pointed out that Barbie's U.S. sales have increased for the third consecutive quarter and his company had generated "early retail excitement" with the September introduction of Elmo.
Mattel's latest version of the furry red Sesame Street character, which laughs, slaps its knee and rolls around on the floor before righting itself, has hit the stores with much marketing buzz and hurrah.
Investors bid up the company's stock price 4.9% to $21.71 per share in early trading on the New York Stock Exchange.
Mattel also said it reduced its third quarter earnings by 3 cents per share, after completing a review of stock option accounting between the fourth quarter 1993 through the third quarter 2006. The company found that non-cash compensation expense was understated by $19 million, or $13 million net of income tax. The review found no backdating of stock option grants, intentional deviations from generally accepted accounting principles, and no material inaccuracies.
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