Tags: Mattel | MAT | toys | stocks

Mattel Goes Strong into Second Half

By Mike Seemuth   |   Tuesday, 09 Aug 2011 12:42 PM

Mattel (MAT) is a dominant worldwide player in the design, manufacture, and distribution of toys. It owns the lucrative Barbie doll product line and could surpass its pre-recession peak in revenue this year.

The El Segundo, California, company reported in July that net income increased $97.1 million in the first half of the year, an increase of 27 percent from last year's first half. Earnings per share in the January to June period rose to 27 cents from 21 cents last year. The bottom line for the full year could sag, though, under the weight of legal costs.

A federal judge in August ruled that Mattel must pay its rival MGA Entertainment $310 million in damages stemming from a long intellectual property fight over MGA's popular Bratz line of dolls. The judge's ruling reversed an earlier jury-trial decision that favored Mattel, which claimed ownership of the Bratz line since a former Mattel employee invented it.

As the seasonally busier second half began, Mattel appeared headed for new heights on the top line of its income statement. The company has 31,000 employees and sells toys in 150 nations.

Mattel reported July 15 that its net sales grew in the six months ended June 30 to $1.02 billion, up 11 percent from the same period last year. A bigger test will come in the July to December period, when Mattel rings up the majority of its annual sales volume. Net sales totaled $5.85 billion last year, an 8 percent increase in comparison with 2009 but still 2 percent below the annual peak in 2007.

Global growth

Most stock analysts following the company in early August had buy ratings on Mattel and none had less than a hold rating on the stock.

A study by market research firm NDP Group shows that global toy sales expanded to $83.3 billion in U.S. dollar terms, an increase of 4.7 percent over 2009. NDP released the study in June.

Jane Zimmy, global senior vice president of NDP, said that it expects "the positive trends to continue in the emerging markets, though it's likely that they will not be as robust as we have seen over the past two years. We also expect continued growth in North America and a rebound in Europe."

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Mattel (MAT) is a dominant worldwide player in the design, manufacture, and distribution of toys. It owns the lucrative Barbie doll product line and could surpass its pre-recession peak in revenue this year. The El Segundo, California, company reported in July that net...
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