Mattel, the world's largest toymaker, said its fourth quarter profit rose 3%, boosted by strong sales of its Barbie and Fisher-price toys, including the popular T.M.X. Elmo doll.
Mattel , based in El Segundo, Calif., reported net income of $286.4 million, or 75 cents a share, for the three months ended Dec. 31, compared to $279.2 million, or 69 cents a share, a year ago. Revenue expanded 14% to $2.11 billion from $1.84 billion last year.
The company's profits also benefited from continuing strong sales of products related to the Disney-Pixar animated film "Cars," giving the company a tough challenge as it heads into 2007 without a major film-related product line.
While sales and gross margins increased for the full year, the company also noted a boost in 2006 earnings from favorable tax decisions and currency exchange rates.
The results easily beat estimates from analysts surveyed by Thomson Financial, who had expected earnings of 67 cents per share on revenue of $1.99 billion.
Sales of its iconic Barbie doll line increased 3% in the United States, marking the fourth consecutive quarter of domestic growth for the brand, which is in the midst of a turnaround.
Barbie sales dipped 2% overseas, which included a benefit from currency exchange rates.
"Though the new team has been working on Barbie for just over a year and there is still work to be done, we're encouraged by the progress to date," Mattel chairman and chief executive Robert A. Eckert told analysts during a conference call.
The company's Fisher-Price unit, which includes the holiday best-selling T.M.X. Elmo doll, led the quarter with a 16% rise in fourth-quarter sales to $806 million.
Sales of its American Girls line increased a modest 2%, with strong sales at its three retail locations offsetting a decline in its catalog business.
The entertainment category saw a 62% boost in sales largely due to the acquisition in the quarter of electronic game and toy manufacturer Radica Games.
Without Radica, the entertainment sector saw growth in the quarter from continued strong sales of "Cars" merchandise.
"'Cars was nothing short of a home run," Eckert told analysts, adding that toys related to the less successful film "Superman" scored only "a double" during the quarter.
Eckert acknowledged that the unexpected strength of the "Cars" line would make 2007 a difficult year by comparison. While Mattel will sell toys related to the next Disney-Pixar film, "Ratatouille," it does not have the licenses for two highly anticipated films, "Spider-Man 3" and "Transformers."
For the year, the company reported net income of $592.9 million, or $1.53 a share, compared with a profit of $417 million, or $1.01 a share, last year.
Full-year results included an 11 cents a share tax-related benefit.
Revenue totaled $5.65 billion, compared with $5.18 billion a year earlier.