Mattel earnings climb nearly 20% in quarter

Toy giant Mattel Inc. reported a nearly 20% rise in profit in the second quarter, beating Wall Street expectations by slashing costs to offset weak global demand. Its shares soared nearly 10%.

Net income totaled $96.2 million, or 28 cents a share, for the three months ended June 30, compared with $80.5 million, or 23 cents, in the same period in 2011, the El Segundo company said Tuesday. Analysts on average were expecting a profit of 21 cents a share, according to Thomson Reuters I/B/E/S. Mattel’s sales remained flat at $1.16 billion.

In a call with industry analysts, Chief Executive Bryan Stockton said Mattel “executed well” by focusing on its core brands and international markets. The company “delivered solid performance, despite the backdrop of a very challenging global economic crisis that’s driving volatility,” he said. “I believe we are well positioned for the second half and the all-important holiday season.”

Among Mattel’s major brands, sales grew 5% for Barbie, 11% for Hot Wheels, 2% for Fisher-Price products and 3% for American Girl.

Stockton added that the company would continue to build momentum with toys tied to the upcoming film “Batman: The Dark Knight Rises.” The new items should help bolster entertainment sales, he said, which slid 36% primarily because of slowing demand for toys related to the 2011 hit kids’ movie “Cars 2.”

Analysts said Mattel helped itself by keeping a sharp eye on costs as well as by raising prices this year.

“They benefited from a litany of things, from price increases to restructuring,” said Margaret Whitfield, a toy analyst at Sterne, Agee & Leach Inc. “It seemed like they have been building momentum while the toy industry was in negative digits.”

Looking forward to the holiday season, Whitfield said Mattel was well positioned with its toy lineup to capture consumer dollars.

“In tough times retailers go with what’s working, where they see momentum, and certainly Mattel has displayed a lot of confidence,” she said.

Mattel shares rose $3.01, or 9.7%, to $34.05 on Tuesday.

Rival toy maker Jakks Pacific Inc. did not fare as well, reporting Tuesday that profit plummeted 95% because of higher fees paid to legal and financial advisors.

The Malibu firm said last month that takeover talks with Oaktree Capital Management, which has been trying to acquire Jakks Pacific, had stalled because the two sides could not agree on terms.

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