Earnings Preview: Mattel

Mattel (MAT) is expected to report Q3 earnings Monday, Oct. 20 before market open, with a conference call scheduled for 8:00 am ET.

Guidance

Analysts are looking for a profit of 71c on revenue of $1.96B. The consensus range is 66c to 75c for EPS, and revenue of $1.92B to $2.05B, according to First Call.

Analyst Views

In September, the Barbie doll maker Mattel asked U.S. District Court Judge Stephen Larson to prevent Bratz doll maker MGA Entertainment from manufacturing, distributing or selling Bratz dolls, and asking the court to stop MGA from using the Bratz name and trademark. This follows a jury decision in August that awarded Mattel $100M, finding that Mattel owned all but four of the original drawings upon which the original Bratz dolls were based. Wedbush believes the jury award of $100M, while below the estimate of $200M to $400M, should have a meaningful impact on the stock.

Toy experts believe that between high food and gas costs and slumps in the housing and job markets, consumers are cutting their discretionary spending, which includes toys for the upcoming holiday season. Toy analyst Chris Byrne says that while the toy industry is generally resistant to recession, 2008 also has the presidential election, which he feels could distract some shoppers, and five fewer shopping days between Thanksgiving and Christmas than last year. To combat this, Mattel has rewired its "Elmo Live" doll and said most of its toys for the holiday season will cost less than $20.