Earnings Preview: Mattel

Mattel (MAT) is expected to report Q1 earnings before market open Monday, with a conference call scheduled for 8:30 am ET on Monday April 21.

Guidance

Analysts are looking for a profit of 1c on revenue of $928.13M. The consensus range is (5c) to 4c for EPS, and revenue of $865.74M to $974M, according to First Call.

Analyst Views

In an April 15 research note, Standard & Poor's said Mattel maintains an "attractive and diversified" suite of owned brands and licensed brands. The firm feels Mattel will continue to generate strong cash flow, grow international sales and maintain a relatively unleveraged balance sheet. However, S&P has near-term concerns, including domestic Barbie and American Girl growth, but says the company's valuation "more than discounts" these risks. The firm says that the Barbie brand should continue to show strong growth outside the U.S. in 2008, and this will mostly offset nearly flat domestic Barbie sales. Additionally, Mattel is likely to restore consumer confidence concerning toy safety; Mattel recalled a substantial amount of toys in 2007 after finding that some products contained lead paint. The company, the firm says, has strong relationships with its major retail customers such as Wal-Mart (WMT) and Target (TGT), and there is no major near-term risk there.