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Thursday, October 19, 2006

Barbie boosts Mattel's sales


Even in middle age, Barbie's a stunner.

Barbie, introduced in 1959, helped boost Mattel 's third quarter sales 7%, driving its stock to a 52-week high on Monday.

The company cited strong sales of Barbie, which the company calls a "fashion" doll, Little People, TMX Elmo and toys related to "Cars," an animated film released by Walt Disney (nyse: DIS - news - people )'s Pixar.

TMX Elmo is the tenth anniversary edition of Sesame Street's popular Elmo doll and is marketed by Mattel unit Fischer Price.

"We think that in the near term, Mattel stock will trade on the fortunes of Barbie, the company's most important and most iconic product in its line," Gerrick Johnson, an analyst at BMO Capital Markets, said in a research report. "While other product lines can generate marginal and incremental sales and profit, we think investor focus will remain on Barbie for some time. Barbie is still in turnaround mode, but we think the brand is gaining some momentum."

Johnson believes Mattel can generate earnings per share of $1.25 in 2006, $1.40 in 2007 and $1.55 in 2008. The estimates include the Radica Games (nasdaq: RADA - news - people ) acquisition announced earlier this month, which the analyst believes will add about five cents a share in annual earnings.

BMO Capital Markets maintained an "outperform" on Mattel.

"We view the rest of the 2006 product line positively and think the company is picking up market share and shelf space and that the company's financial performance will reflect this strong product performance," Johnson said.

The toy maker's sales figures included a 5% gain in domestic sales and a 12% increase in international sales.
Mattel reported third-quarter net income of $239 million, or 62 cents a share, compared with $225.3 million, or 55 cents a share, for the same period a year ago. Current earnings beat Wall Street's consensus by one cent.
Net sales for the third quarter were $1.7 billion, up about 7% from the same period a year ago.

Mattel closed Monday at $21.30, up 60 cents or 2.9%. The 52-week range is $14.52 to $20.75.

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NOTE: I do not represent all of these photos as my own; these are photos of Barbie and other dolls that I find to be fabulous! If you are the actual photographer and would like to be credited, send me an e-mail.