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New Barbie Items Dress Up Mattel Profit

July 23, 1999|From Bloomberg News

Mattel Inc., the world's biggest toy company, said Thursday that second-quarter profit rose 81% as new Barbie products fueled strong retail sales, before a charge for restructuring resulted in a loss.

The El Segundo-based company said profit from operations rose to $62.5 million, or 15 cents a share, from $34.6 million, or 8 cents, for the year-earlier period. The latest results match the average estimate of seven analysts polled by First Call Corp. Sales rose about 1%, to $1.04 billion from $1.03 billion.

Mattel said new Barbie doll products, including Sleeping Beauty Barbie, Yo-Yo Skipper and Generation Girl Barbie, are driving strong retail sales.

Outside the United States, however, sales are down across the board, especially in Europe, partly because of a sluggish economy, said Glenn Bozarth, a company spokesman.

Mattel took a pretax charge of $345 million in the quarter for merger and restructuring costs. The moves are expected to result in estimated savings of $50 million in 1999 and at least $400 million over the next three years, the company said.

Including the charge, the company had a loss of $204.3 million, or 50 cents a share, contrasted with net income of $4.58 million, or 1 cent, a year earlier. Per-share figures reflect the payment of dividends on convertible preferred stock.

Mattel completed its $3.6-billion purchase of Learning Cos. in May, making it the No. 2 consumer software company after Microsoft Corp. Along with No. 2 toy maker Hasbro Inc., Mattel has been shifting to computer-based toys, whose sales and profit growth have been outpacing that of traditional children's products.

Mattel shares closed unchanged at $23.88 on the New York Stock Exchange.

At a Glance

Other earnings, excluding one-time gains and charges unless noted:

* ACT Networks Inc. of Calabasas reported a fiscal fourth-quarter loss of $2.9 million, or 30 cents per share, compared with a loss of $13.1 million, or $1.43, a year ago. Revenue slipped to $13.2 million from $13.6 million.

* Cheesecake Factory Inc., based in Calabasas, reported second-quarter net income of $5.3 million, or 25 cents a share, compared with $3.5 million, or 18 cents. Revenue rose to $85.8 million from $64.3 million. Same-store sales for the restaurant operator rose 33% to $79.4 million.

* K-Swiss, a Los Angeles-based maker of athletic footwear, reported record second-quarter net income of $6.7 million, or 58 cents a share, on revenue of $67.2 million. The results beat Wall Street expectations. For the like period last year, the company earned $2.6 million, or 20 cents, on revenue of $41.0 million.

* Reliance Steel & Aluminum Co., a Los Angeles-based metals service center, reported record second-quarter net income of $13.7 million, or 73 cents a share, compared with $12.5 million, or 66 cents, a year ago. Revenue rose to a record of $384.7 million, up 18% from $326.2 million.

* Calabasas-based interactive video game developer THQ Inc. reported record second-quarter net income of $4.4 million, or 36 cents per share, compared with $2.8 million, or 25 cents, a year ago. The latest results beat analysts' average estimate of 32 cents. Revenue rose to $51.3 million from $29.3 million.

* Santa Monica-based Veterinary Centers of America Inc., an owner and operator of veterinary hospitals and laboratories, reported second-quarter net income of $6.9 million, or 31 cents including charges related to Y2K upgrades, compared with $6.1 million, or 28 cents, a year ago. Revenue increased to a record $86.2 million from $74.7 million.

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MORE EARNINGS: C3, C6

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