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.

GE Q3 Revenue Disappoints

GE Q3 Revenue Disappoints

General Electric (NYSE: GE) opened at $16.35. So far today, the stock has hit a low of $16.19 and a high of $16.41. GE is now trading at $16.35, down $0.45 (-2.68%). Over the last 52 weeks the stock has ranged from a low of $5.73 to a high of $21.04. GE reported earnings this morning, posting a third-quarter profit of $2.41 billion, or 23 cents per share, on revenue of $37.80 billion. Analysts had forecast a profit of 20 cents per share on revenue of $40.03 billion.

Retail Sales Fall Less Than Forecast

U.S. Economy: Retail Sales Fall Less Than Forecast

Sales at U.S. retailers fell less than forecast in September after the Obama administration’s cash-for-clunkers program expired, signaling consumers are gaining confidence in the outlook for an economic recovery.

The 1.5 percent decrease followed a 2.2 percent gain the prior month, figures from the Commerce Department showed today in Washington. Sales excluding automobiles climbed 0.5 percent, more than projected. Gains in prices of goods imported into the U.S. slowed last month, a separate report showed.

Stocks climbed and Treasuries fell as the report eased concern that household purchases, which make up about 70 percent of the economy, would sag without government support. While gains in spending from food to furniture suggest consumers will help pull the nation out of recession, Federal Reserve policy makers say demand is likely to be curbed by further job losses.

Retail Sales See Some Hope

Now that consumers get used to high gas prices, retail sales at chain stores have picked up again. Sales were better in June as compared to May.

Sales at retail stores rose 1% for the week ended June 9 from the prior week. It was the strongest week-over-week showing since the week ending February 3, 2007 when sales rose 1.3%. Year-over-year, sales rose 2.1% for the period. Sales were mixed for the first week of June with the healthiest week-over-week gain in four months, but the year-over-year pace was a tad softer.

Last week, some of the nation's biggest retail chains, including Wal-Mart (WMT), Target (TGT), Gap and J.C. Penney reported May sales which sent out mixed signals. Wal-Mart, the world's largest retailer, had a weak sales gain of 1.1% last month and offered a softer outlook for June as gas price pressures and the ongoing housing softness continues to restrict the buying ability of its mostly paycheck-to-paycheck consumers. However other merchants actually enjoyed better sales, including Wal-Mart's rival Target, department store chain Kohl's (KSS) and a handful of teen clothing shops.