Mattel’s Profit Dips Due to Weaker Demand and Litigation Charges (MAT)
NYSE: MAT) reported weaker than expected fiscal fourth-quarter results on Friday as weak demand during the holiday-season quarter and massive litigation charges dented its bottom line.
MAT shares were marginally higher in early trading.
Mattel’s lackluster results come just a week after when its smaller rival Hasbro Inc. (NASDAQ: HAS) warned that weaker demand for toys and games in the fourth quarter will hurt its revenue. The U.S. toy and video gaming industry is going through a lean patch as U.S. consumers are still spending frugally in the backdrop of economic uncertainty. Weakness in the European markets along with proliferation of smartphones and tablets usage is also impacting the demand for toys and games.
Reacting over the results, Mattel’s Chief Executive, Bryan G. Stockton, said, “(results were) particularly gratifying given the challenging global economic and cost environment,” highlighting that 2012 was the second straight year when the Company posted over $1 billion in operating income.
For the fiscal fourth quarter, Mattel reported earnings of $306.5 million, or 87 cents a share, compared with profit of $370.6 million, or $1.07 a share, in the year earlier quarter.
The Company said that it took a charge of $137.8 million associated to litigation after a District Court ruled against the Company as to a copyright case brought by MGA Entertainment Inc.
After excluding onetime items, adjusted earnings stood at $1.12 a share.
Sales during the period climbed 4.7% to $2.26 billion. Analysts polled by Thomson Reuters were expecting earnings of $1.15 a share on revenue of $2.29 billion.
While sales of Barbie branded products slumped 4%, sales at its entertainment business-which also includes entertainment games, slumped 13%.
On consolidated basis, worldwide sales of Mattel’s boys and girls brand toys (Barbie, Hot Wheels) climbed 5% to $1.41 billion, leaped 13% at American Girl brands while it jumped 6% at Fisher Price Brands.
More Posts by this author
- Economic Outlook Continues to Improve but Sequester Can Spoil the Party
- Chevron Q4 Earnings Edge Past Street’s Estimate as Refining Business Flourishes (CVX)
- Gold Prices Settle Higher, Logs weekly Gains but Outlook Bearish
- Market Update After Hours February 1
- Stocks Rally on Economic Data; End Higher for the Week
- Gold Prices Settle Higher; Silver Prices Rise Sharply
- Stocks Headed for a Sharply Higher Finish; Dow Jones Above 14,000
 |
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
|
