Cars toys boost Mattel profits

movie toys push income up by 3% over last quarter

Jan 30, 2007 Dominic von Riedemann

Mattel is seeing big profits from Cars merchandise, but 2007 could be a different story.

(Source: www.bcdb.com)

Mattel sure loves them Cars. Thanks to licensing from the Disney/Pixar hit, the world's largest toy manufacturer scored a 3% jump in profits over their last quarter of 2006.

"Cars was nothing short of a home run," Mattel chairman/CEO Bob Eckert told analysts during a conference call on Monday. He was less thrilled with sales from their Superman Returns line; extending his baseball metaphor, Eckert said the line only scored a "double."

Mattel's Barbie and Fisher-Price lines also sold very well, especially the T.M.X. Elmo doll. Because the fourth quarter includes sales from the lucrative Christmas season, profits from that period account for over 30% of Mattel's yearly total.

The El Segundo, California-based company reported a net income of $286.4 million (75 cents per share) for the three months ended December 31, compared to $279.2 million (69 cents per share) the previous year. Revenue leaped 14% to $2.11 billion from $1.84 billion in 2005.

Mattel also recorded a net income of $592.9 million ($1.53 per share) compared with a $417 million ($1.01 per share) profit in 2005. The company totaled $5.65 billion in revenue, up from $5.18 billion last year.

The company also racked up a 62% sales jump in their entertainment division, thanks to their acquiring electronic game and toy manufacturer Radica Games Ltd.

However, Eckert admitted that 2007 could be tougher for Mattel. The company can sell toys related to Disney/Pixar's next animated flick, Ratatouille, but they lack the licensing for either Transformers or Spiderman 3, two summer movies that are expected to do well in licensing.

The toy manufacturer hopes to overcome that by revamping their ever-popular Barbie line for 2007.

"Though the new team has been working on Barbie for just over a year and there is still work to be done, we're encouraged by the progress to date," Eckert says.

Reaction on the New York Stock Exchange was muted, as Mattel shares only rose by one cent to $23.97 per share.

The copyright of the article Cars toys boost Mattel profits in Animated Films is owned by Dominic von Riedemann. Permission to republish Cars toys boost Mattel profits in print or online must be granted by the author in writing.