The Gory Details on Mattel's Double Miss

Seth Jayson, The Motley Fool
Updated

Mattel (NAS: MAT) reported earnings on April 16. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Mattel missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted significantly.


Gross margins expanded, operating margins dropped, and net margins dropped.

Revenue details
Mattel chalked up revenue of $928.4 million. The 12 analysts polled by S&P Capital IQ expected to see revenue of $986.5 million on the same basis. GAAP reported sales were 2.5% lower than the prior-year quarter's $951.9 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.06. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.07 per share on the same basis. GAAP EPS of $0.02 for Q1 were 60% lower than the prior-year quarter's $0.05 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 51.0%, 130 basis points better than the prior-year quarter. Operating margin was 3.1%, 150 basis points worse than the prior-year quarter. Net margin was 0.8%, 90 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.16 billion. On the bottom line, the average EPS estimate is $0.21.

Next year's average estimate for revenue is $6.48 billion. The average EPS estimate is $2.38.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 635 members out of 728 rating the stock outperform, and 93 members rating it underperform. Among 209 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 185 give Mattel a green thumbs-up, and 14 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Mattel is outperform, with an average price target of $35.73.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Mattel. Motley Fool newsletter services have recommended creating a bear put spread position in Mattel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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