Toy maker Mattel saw it’s profits and share price drop.
April 17, 2012- Mattel, the toy company, announced that its profits had fallen by 53%. The company said that an acquisition of $680 million is what affected the company’s profits. Mattel also announced that sales were slower for Hot Wheels and Barbie products.
The giant toy company saw its stock drop by 9% after reporting its first quarter earnings. Along with its dip in sales, the company also reported much higher production costs as a reason its profits dipped. Sales for the quarter were $928.4 million, which was 2% less than the same quarter one year ago. Profits plummeted to $7.8 million or 2 cents a share, from over $16.6 million and 5 cents per share one year ago. Analysts had thought the company would return a profit of 7 cents per share.
Mattel said its results had been affected by its $680 million acquisition of the toy firm HIT Entertainment. HIT makes preschool toys such as Barney and Thomas the Tank Engine. Putting aside the acquisition expenses and integration, the company says its profit would have been 6 cents per share.
Usually the first quarter of each year is slow for a toy company, which has a noticeable drop in sales following the holiday spending season. Bryan Stockton the company CEO who just recently took over the top spot from Robert Eckert was quick to say the company was optimistic about the remaining three quarters of the year.