Mattel Earnings: Here is What You Need to Know

From El Segundo, Calif., early Tuesday morning, toy manufacturer Mattel, Inc. (MAT), announced its earnings report for the second quarter of 2012, and its overall revenue was consistent with estimates but its EPS was much better than expected.  As a result, Mattel stock jumped 9 percent in early Tuesday trading to about $34 per share.

The overall revenue number for the quarter was $1.16 billion, which was in-line with estimates and was down a modest 0.3 percent over the same period a year ago. However, the earnings per share was 28 cents per share, which beats estimates by 7 cents (33 percent) and was a 22 percent improvement year-over-year. Net income for the quarter was reported at $96 million, about 20 percent better than last year’s $80.5 million for the same quarter in 2011. Sales in North America grew by 1 percent, but international sales sank by 1 percent – taking into account a 10-percent negative impact on currency exchange, according to the company’s press release.

In the release, CEO Bryan G. Stockton said, “In the second quarter, we delivered solid performance as we continued to build momentum with key brands, such as Barbie, Monster High, American Girl and Hot Wheels, as well as the Batman – The Dark Night [sic] Rises property, despite a continued cautious global retail environment and a strengthening U.S. dollar. As we look forward, we remain focused on executing our portfolio of strong brands, countries and customers to deliver in the all-important holiday season.”

The company also reported a 31 cent per share dividend in the third quarter, payable Sept. 12 to shareholders of record as of August 29.

The EPS report is likely what the stock price is reflecting, which bodes well for hedge funds like Phill Gross and Robert Atchinson’s Adage Capital Management and John Thiessen’s Vertex One Asset Management. Both of these funds increased their share holds during the first quarter of 2012, with Adage boosting its share by 1 percent to $16 million by the end of March, and Vertex One adding 8 percent to just shy of $12 million.