At first glance, the numbers don't look too hot for Mattel. The company announced that profit was off by a pretty hefty 48% in the quarter, down to 3 cents per share on $11.8 million. This is down from $22.8 million, or 6 cents per share, for the same period last year. The company blamed most of the decline in weak demand for its Barbie dolls, and higher costs that it had to endure in the quarter.
From the above paragraph, you may be expecting to see the company being punished in the premarket, but in fact, shares of the stock are trading up a blazing 13.5% as I write this, and were up over 18% as of about 5 minutes ago. Why? Simple, in Wall Street it is all about expectations, and the company was able to outperform analysts estimates for the quarter, which were looking to see only a 2 cent per share report.
The company outperformed in terms of revenues as well. Analysts had been looking to see the company show revenues during the quarter of $1.04 billion, but the actual figures were higher, at $1.11 billion.
Barbie is a huge component of the Mattel lineup, and sales of the dolls dropped by 6% in the quarter. This drop was offset partially by solid growth from a couple of other components to the Mattel lineup, with Hot Wheels seeing a sales increase of 5%, while sales for its doll collection American Girl jumping 10%.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.