Mattel (MAT) Issues Solid Q2 Earnings Beat; Analysts Weigh In

Shares of Mattel (NYSE: MAT) are modestly outperforming the broader stock market Friday following better-than-expected earnings and sales for its second quarter. The stock last traded at $27.44, up 2.5 percent from Thursday's close.

Net revenue for the quarter ended June 30, 2011 totaled $1.16 billion, up about 14 percent from nearly $1.02 billion in the same quarter last year. Mattel's Girls & Boys Brands unit saw sales rise a sharp 22 percent to $795.6 million and the company's Fisher-Price segment had sales rise 4 percent year-over-year to $400 million. Total sales at the American Girl unit rose 13 percent to $66.4 million.

Quarterly net income rose 56 percent from $51.6 million to $80.5 million. Earnings came to 23 cents per share, up 64 percent from the 14 cents per share posted in the year-ago quarter.

Wall Street analysts had been expecting second-quarter sales of $1.11 billion on EPS of 16 cents.

The company's Bob Eckert, chairman and CEO, said, "For the second quarter, I am very pleased with the continued global momentum across our portfolio, including core brand strength as well as the outstanding performance of the CARS 2® entertainment property.Despite the mixed economic news, I am encouraged by our strong operating results and continue to believe we are well-positioned for the all-important second half of the year."

Around the Street, analysts liked the results, but were mixed going forward:

• Goldman Sachs - Sees upside following the "sales driven beat," but said it is restraining its "enthusiasm at this stage despite the strong results as they were primarily driven by a robust initial CARS 2 sell-in." The firm believes the sell-through could be below estimates in the next two quarters, especially considering a sharp rise in inventory levels last quarter. Maintains a Neutral rating and $31 price target.
  
  
• KeyBanc - Said it was "particularly impressed with strong sales momentum." Also notes continued traction in international markets and entertainment properties, as well as in core brands like Barbie and Monster High. Maintains Buy rating and $35 price target.

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