Cost-cutting helped Mattel Inc. report sharply higher second-quarter earnings today, but the toy maker's revenue tumbled as sales of Barbie and other key product lines fell during the quarter.
The El Segundo-based company reported net income of $21.5 million, or 6 cents a share, for the three months ended June 30, an 82% increase over the profit of $11.8 million, or 3 cents, the company reported a year ago.
The profit report beat Wall Street forecasts that Mattel would break even on a per-share basis, and the company's stock surged $1.23, or 7.6%, to close at $17.42.
Worldwide sales came in below expectations, however, falling 19% to $898.2 million. Sales fell more overseas than in the U.S., because of a stronger dollar.
The lack of toys tied to big summer movies was also a factor in the sales decline, as were the global economic slowdown and continued weakness in consumer spending.
Last year, Mattel's results benefited from product tie-ins with movies such as "Speed Racer" and "The Dark Knight."
"In light of the challenging global economy, the quarter's results met our expectations, with revenues negatively impacted largely by our lack of toys based on summer entertainment properties as well as foreign exchange rates," Chief Executive Robert A. Eckert said in a statement.
Mattel said it slashed ad spending by 23% during the quarter and cut other overhead costs by 18%.
"The driver of the [higher profits] was cost control," analyst Chris White of Wedbush Morgan said in a research note.
He raised his full-year profit estimates for Mattel to $1.26 a share from $1.23 for 2009 and to $1.50 from $1.43 for 2010. He reduced his revenue estimates for both years, reflecting concerns about continued market weakness.