Two stocks come to mind when thinking about Christmas: Hasbro (HAS) and Mattel (MAT). Last year around this time, I discussed Hasbro. This year, I thought I'd take a brief look at Mattel.

The owner of the iconic Barbie industry has been trading in a relatively tight range over the past twelve months. The 52-week low is $19.07, and the 52-week high is $26.70. The shares closed down 1.3% on Thursday to settle at a quote of $25.88. (Hasbro likewise faced selling pressure on that day, losing over 2%.) The chart shows some rocky sideways action, followed by an uptrend.

Mattel, Inc. (NYSE: MAT) is all about fun and games, but it doesn't play around when it competes against Hasbro, Inc. (NYSE: HAS) and JAKKS Pacific (NASDAQ: JAKK). In fact, the stock is up over 7% today as of this writing on the toy manufacturer's earnings news. According to Reuters, Mattel made 6 cents per share during the second quarter, beating estimates by a whopping five pennies.

Pretty good news for Mattel, considering it's been having trouble lately with its Barbie line. Mattel has also had problems with its top-line sales. They dropped 19% in Q2. Fluctuations in the value of the dollar helped to hinder the sales picture, but make no mistake -- Mattel has to step things up a couple notches to keep the top line healthy. Toys are a difficult category to sell during a recession. And when toys do sell, even during the Christmas retail period, they might not command top dollar. Hot toys do, of course, but an entire portfolio cannot necessarily be saved by a single fad item.

Mattel Inc. (NYSE: MAT), which competes with toy makers Hasbro Inc. (NYSE: HAS) and JAKKS Pacific Inc. (NASDAQ: JAKK), will be reporting earnings for the fourth quarter on Monday, February 2. This is going to be an exciting one for the market. Why? Well, it was an awful Christmas for retail. If Mattel, a company that thrives on the season, can beat expectations, then investors can maybe feel a little bit better about the market. Amazon.com (NASDAQ: AMZN) surprised Wall Street and went beyond expectations during the holiday season, so perhaps there is hope for Mattel.

But I can't say I'd be willing to bet on it. Mattel should earn somewhere around $0.72 per share on the bottom line. That wouldn't be a great number, but it wouldn't be a disaster, either, because in the previous year Mattel delivered $0.76 per share.

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

Founded in 1945 in a garage workshop in southern California, Mattel Inc. (NYSE: MAT) is now the world's biggest toy maker, with a market cap of about $5.2 billion. Number two Hasbro Inc. (NYSE: HAS) has a market cap of about $4.2 billion. Mattel produces from everything Barbie and American Girl, to Hot Wheels, Fisher Price toys, Scrabble, and the Magic 8 Ball, as well as tie-ins with Pixar, the Dark Knight, Harry Potter, and Nickelodeon. However, in 2002 Mattel shut its last factory in the United States, and since then most of its products have been produced in China.

That decision came back to bite Mattel when, beginning in the summer of 2007, it was forced to issue a series of recalls of Chinese-made toys that contained lead paint. The company is still reeling from that PR disaster, which for some reason included an apology from Mattel to the Chinese people. The situation prompted BloggingStocks contributor Tom Barlow a year ago to suggest (tongue in cheek) that Mattel merge with Waste Management Inc. (NYSE: WMI) so that toxic toys could go directly where they belonged, bypassing the middleman (i.e., the children). That would be one way to make over the company, I guess.

As Christmas of 2007 approached, it looked like the worst might be behind Mattel. The year-end numbers were respectable, and some investors were beginning to eye Mattel again. But first quarter 2008 results were disappointing, and by mid year, expectations were very low. The share price has continued to slide since the recalls, reaching a multi-year low recently. While there was a copyright infringement lawsuit settled in Mattel's favor (though they didn't get as much out of it as they wanted), and they are no doubt hoping for the Dark Knight and other tie-in merchandise to help boost what otherwise looks like it could be dismal holiday season for retailers, the newest thing Mattel has to contend with is claims by some parents that one of its dolls secretly promotes Islam, which Mattel denies.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Altera Corp. (NASDAQ: ALTR) beat Q2 estimates, offered guidance, and announced a quarterly dividend.
• Capital One Financial Corp. (NYSE: COF) profit tumbled as consumers stopped paying off credit cards.
• Coca-Cola Co. (NYSE: KO) mixed Q2 results were boosted by international operations.
• Eaton Corp. (NYSE: ETN) reported strong Q2 numbers but shares still fell afterward.
• Genentech Inc. (NYSE: DNA) did not meet analysts' estimates but lifted its full-year outlook (see transcript).
• Google Inc. (NASDAQ: GOOG) posted strong results that fell short of Wall Street expectations.
• Intel Corp. (NASDAQ: INTC) better-than-expected Q2 results lifted other tech stocks as well (see transcript).
• JPMorgan Chase & Co. (NYSE: JPM) posted better-than-expected Q2 results (see transcript).
• Lawson Software Inc. (NASDAQ: LWSN) net income fell due to an auction-rate securities related charge.
• Mattel Inc. (NYSE: MAT) Q2 results topped expectations despite lower profits on weak demand for Barbie.
• Nokia Corp. (NYSE: NOK) posted better-than-estimated Q2 earnings on strong sales growth.
• Overstock.com Inc. (NASDAQ: OSTK) fell nearly 30% after reporting earnings for the second quarter.
• Rockwell Collins Inc. (NYSE: COL) posted strong Q3 results due to long-term government contracts.
• Sun Microsystems Inc. (NASDAQ: JAVA) preliminary Q1 results sparked an after-market rally.
• Wells Fargo & Co. (NYSE: WFC) beat low earnings expectations and also raised its quarterly dividend.
• Yum! Brands Inc. (NYSE: YUM) beat Q2 expectations due in part to strength overseas, but shares fell.

For more highlights from this week, see: Citigroup, eBay, IBM, Merrill Lynch, Microsoft and others

The earnings crunch continues next week. Among companies scheduled to report are Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Merck (NYSE: MRK), Texas Intruments (NYSE: TXN), Caterpillar (NYSE: CAT), Halliburton (NYSE: HAL), United Parcel Service (NYSE: UPS), Wachovia (NYSE: WB), Yahoo! (NASDAQ: YHOO), Amazon (NASDAQ: AMZN), Anheuser-Busch (NYSE: BUD), AT&T Inc. (NYSE: T), McDonald's (NYSE: MCD), PepsiCo (NYSE: PEP), Pfizer (NYSE: PFE), Boeing (NYSE: BA), Hershey (NYSE: HSY), and Southwest Airlines (NYSE: LUV).

Visit AOL Money & Finance for more earnings coverage.

Shares of toy maker Mattel (NYSE: MAT) are soaring in premarket trading today, after the company announced better-than-expected numbers for its second quarter.

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.

Mattel (NYSE: MAT), a toy company that competes with Hasbro (NYSE: HAS) and JAKKS Pacific (NASDAQ: JAKK), got some good news earlier this week. Its stock was upgraded by analyst Gerrick Johnson of BMO Capital Markets, according to the AP, although it wasn't necessarily an overwhelming vote of confidence. The analyst is switching the rating from "underperform" to "market perform," and if you check out the AP piece, you'll see that he basically is saying that while he doesn't see a big reason to sell the stock, he doesn't see a big reason to buy it either. This was a call based on simple valuation.

I was glad when I read this clarification because, when I first spied this headline, I was a bit flummoxed. I honestly didn't expect Mattel to receive some huge upgrade at this point, even though I agree that the stock is certainly cheap. My main reason for this hinges on the best-of-breed character of Mattel's colleague Hasbro. I just wrote about this company and the strength of its stock at the beginning of the week, and if I were to buy any toy business right now, it probably would be the maker of Monopoly and Mr. Potato Head. Hasbro's got the brand strength as well as the stock strength, it seems, and even though Mattel packs a dividend-yield punch at over 4%, this market might be too tough to go with companies that are nowhere near a bullish trend.

Long-term, the maker of Barbie will rebound. Short-term, it may languish. So you'll have to consider your timeframe when taking a look at Mattel and Hasbro. Mattel does have a nice yield, but Hasbro and its product portfolio could be better positioned come the holiday season. It's going to be an interesting battle between these two rivals once the weather turns cold...

Disclosure: I don't own any company mentioned here; positions can change at any time.

After Mattel (NYSE: MAT) announced its first huge lead-based paint recall spanning dozens of my children's favorite toys, from Diego to Elmo (how could you?), my initial response was something along the lines of: no more Chinese toys, ever! After the second recall, largely focused on Polly Pocket dolls (I have boys but still, Polly Pocket is hard to resist) and choking hazards, I went even further and darkly considered removing the plastics from my family's consumption altogether -- more than one friend made that decision, too, putting plastic toys and Tupperware in garbage bags and divesting entirely.

Late last night, Mattel announced yet another recall, this one not quite so big as the others and focused largely on small parts of Barbie accessories -- the dog from the Barbie Dream Puppy House; the cat from the Barbie Dream Kitty Condo; the dog and dinner plates from the table and chairs kitchen playset -- as well as a few toddler toys, two GeoTrax trains and the lid from a bongo drum in a Big, Big World playset. And I? Had almost no reaction. I didn't frantically root through my children's toy boxes, searching for toxic toys. I didn't email all my friends, using a subject line with several exclamation points. I didn't call my pediatrician's office to schedule a blood lead test (ok, so I've already done that). Mattel, I've decided, isn't the bad guy here; nor am I quite as angry at China (even though I'll admit to a greatly heightened blood pressure when I heard that a Chinese government official objected to lead limits in children's jewelry).

The thing is, while I've decided to severely limit my consumption of plastic children's toys, this isn't about them anymore.

Tread lightly on America's icons is a lesson China Barbie, the porn purveyor, is learning from Mattel Inc. (NYSE: MAT), the owner of the Barbie brand. The company has gone to court to force the adult entertainer to take down her pay-to-play site, claiming China Barbie is taking advantage of the toy's name in order to peddle her 'wares.'

The differences between the real Barbie and China Barbie, however, cause me to wonder just how real is the potential for confusion. For example, China Barbie claims to have escaped the drudgery of investment banking to star in such classics as Me Luv You Long Time, Extreme Teen 15, and Ethnic Cheerleaders 8. Barbie's latest flick, Barbie as The Island Princess, is a musical suitable for the whole family.

China Barbie, according to the movie database IMDb, was born in New York City in 1978, while Barbie entered the world back in 1959, certainly far too long ago to get a casting call for Extreme Teen movies. Barbie is noted for her fun-loving but chaste lifestyle, while CB's films leave no doubt that she is anything but maidenly. China Barbie's dad was Jamaican, her mother Chinese. Barbie Millicent Roberts is the daughter of ultra-white parents Robert and Margareth Roberts of Willow, Wisconsin.

And we all know that the real Barbie would rather stick her head in her toy oven than ever voice the grammatically incorrect, "Me Love You Long Time."

update: Apparently, the threat has worked, as chinabarbie.com went down as fast as, well, China Barbie ...

Since everything else has an MP3 player built into it, why not put one in that Barbie doll. Mattel (NYSE:MAT) has decided to do just that. With its stock down almost 15% over the last three months, the company will do almost anything for positive PR.

The new doll gives its owners the chance to log onto BarbieGirls.com where she "unlocks pages and pages of games, virtual shops and online chatting functions," according to The New York Times.

The new Barbie is apparently part of an industry trend to sell toys which encourage children to go to the web. In many cases when they get there they will find things to buy along with free games. How clever.

Mattel wants little girls and their parents to think the cyber-Barbie is a better Barbie. As one Mattel executive put it: "For girls to understand the level of detail, the level of content, truly the experience of BarbieGirls, we wanted to allow them to play on the site."

Perhaps the age of the plain old doll that parents bought to allow their children to use their imaginations is gone. It is worth mourning. It is being replaced with toys that replace child-like creativity with websites where kids can buy more stuff. Maybe they can use the debit card for 7-year olds that marketing gurus are planning.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Last week, I looked at toy maker, Hasbro (NYSE: HAS). Today, we turn to toy maker Mattel (NYSE: MAT), which is being recommended by Jocelynn Drake.

The analyst with Schaeffer's Investment Research notes, "Mattel skipped into the earnings spotlight; second-quarter net income jumped 15.2% to $43.5 million, or 11 cents per share, with sales for the 3-month period up 6.5% to $1.02 billion."

Revenue for the second quarter, she notes, was boosted by favorable exchange rates and sales growth for the firm's Barbie and Hot Wheels toys, which rose 6% and 20%, respectively.

She explains, "Heading into the earnings report, investors were extremely skeptical of the shares. Schaeffer's put/call open interest ratio has risen to 0.77, which is higher than 84% of all those taken during the past 52 weeks."

Toy giant Mattel Inc. (NYSE: MAT) released better 1Q 2007 earnings, but the company is still headed in the wrong direction because Barbie is losing her luster.

The good news is that sales revenue was$940.3 million, up 19% from 1Q 2006. Operating income was actually income for the quarter, totaling $20.6 million, compared with an operating loss of $32 million in 1Q 2006. The bad news is that net profit for the quarter fell 60% to $12 million. Much of the decline is explained by a $57 million tax benefit in 1Q 2006. Mattel showed a profit of $0.03 per share for 1Q 2007, compared to $0.08 per share in 1Q 2006, a 62.5 % decrease.

U.S. total sales were up 10% for the quarter, 29% worldwide. Much of this increase was driven by toys for the pre-school market. Fisher-Price toy sales increased 27%. Sales of Hot Wheels (mainly for boys) increased 15%.

Unfortunately, Barbie sales account for 20% of total company sales, and 30% of total company profits. Barbie revenue plunged 21% in the U.S. and increased just 2% worldwide. To counteract this development, Mattel will launch BarbieGirls.com on April 26th, a worldwide social networking site for all things Barbie. Mattel is hoping to build an online community where girls (and boys) can chat and design customized Barbie adventures. Mattel will also bring out Island Princess Barbie later this year.

Prices of toys manufactured in China, 80% of the total toy manufacturing market, have increased along with the price of raw materials. Mattel is betting heavily that youth electronics will offer larger growth prospects rather than dolls, actions figures and board games.

For parents of daughters that are not blond-haired and blue-eyed, the "princess phase" of girlhood is often something to be endured and puzzled over. I watched, pained, as my beautiful black-haired daughter spent much of her third year asking for blond dolls. By kindergarten there was a powerful group of girls that controlled her classroom's social dynamics -- all blond. One mom noted she'd heard that could happen as blond girls become the anointed ones at very young ages.

My younger daughter is now in her princess love phase. And, specifically, it is the blond princesses of The Walt Disney Company (NYSE:DIS) that are somehow her favorites -- Cinderella, Sleeping Beauty. Belle of "Beauty and the Beast" has light brown hair and she gets a nod as does red-haired Ariel of "The Little Mermaid." Whatever Disney does to get into the hearts and minds of children, it does very well since these are not toys or brands we've chosen to emphasize as parents.

So when I learned that Disney will create its first black princess, I breathed a sigh of relief. The hand-drawn animated musical, set in New Orleans and called "The Frog Princess" will feature "Maddy," a young resident of the French Quarter. It won't be released until 2009, but I'll surely take my daughters to it -- even though they will by then, thankfully, both be out of the princess phase, which seems to end mercifully around age four.

Thanks to our sister blog BloggingBaby for the heads-up on this year's Toy of the Year (TOTY) Awards. Mattel, Inc. (NYSE:MAT), through its subsidiary Fisher-Price, once again showed the value of its toy lineup by gathering several key awards.

Top winner of the Toy Industry Association awards was, as you might guess, T.M.X. Elmo, the gotta-have-it can't-find-it hit of the past Christmas season. Elmo won the top prize as Overall Toy of the Year as well as Infant/Preschool Toy of the Year. When asked for comment, Elmo was not able to stop giggling long enough to express his delight.

The company also won the Electronic Entertainment Toy of the Year for its Kid-Tough Digital Camera.

As Beth Moon Gaston told us in an earlier blog, the continued popularity of Barbie has also contributed to an upgrade of Mattel by Lehman Brothers Holdings. Mattel hit a 52-week high today at $27.47 before closing at $26.90.

In researching this story, I ran across some interesting tidbits about Barbie you may not know. According to the official Mattel backstory, her full name is Barbara Millicent Roberts, daughter of George and Margaret Roberts of Willows, WI. She attended Manhattan International High School. Her long-time arm candy's full name is Ken Carson. She has had 38 pets, including a panda, lion cub and zebra. In addition to her profession of flight attendant, Barbie also holds a pilot's license and flies commercial airliners.

Perhaps we'll see her in the cockpit at JetBlue. They could use her charm.

Apparently, as Aqua once warned, it's a Barbie world, we just live in it. Toy maker Mattel Inc. (NYSE:MAT) earned an upgrade this morning from Lehman Brothers Holdings (NYSE:LEH), which lifted its rating to "equal weight" from "underweight." The brokerage attributed its change of heart to the increased popularity of the controversially-proportioned doll, which celebrates its 48th birthday in early March. LEH is also encouraged by MAT's earnings-growth estimate of 10 percent, excluding buybacks, for 2008.

In early trading, MAT shares have ramped up more than one percent to a new 52-week high. The stock is now trading in territory not seen since May 1999 and remains supported by its 10-day moving average.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.