Mattel earnings fall; economy takes toll

Mattel earnings fall; economy takes toll

Mattel Inc., the largest U.S. toymaker, said Friday its fiscal third-quarter profit declined 3 percent as the tough economy dampened demand for key brands like Barbie and Fisher-Price.

Chief Executive Robert A. Eckert said Friday that revenue "continues to be challenging this year" because of the economy, stronger dollar and a lack of toys tied to hot movies and other entertainment.

A year ago, results were boosted by toys tied to movies including "Kung Fu Panda," "Speed Racer" and "The Dark Knight."

The company said it has continued to cut costs to maintain profit margins. In response to weak sales and cautious ordering by retailers, toy makers have been reducing spending and slashing inventory in an effort to preserve profit.

Mattel, which is based in El Segundo, Calif., is in the midst of a cost-cutting plan designed to save $180 million to $200 million over two years.

Profit for the quarter ended Sept. 30 declined to $229.8 million, or 63 cents per share, matching analyst expectations. A year ago the company earned $238.1 million, or 65 cents per share.

Revenue declined 8 percent to $1.79 billion, partly because of the stronger dollar. Analysts polled by Thomson Reuters, on average, predicted revenue of $1.78 billion. When the dollar rises in value, companies' overseas revenue translates back into fewer dollars.