Mattel Profit Off Despite Sales Gain

Despite an 11% increase in third-quarter sales, profits at Mattel fell 23.6% from a year ago because of higher interest, advertising and other expenses and a smaller gain from a tax-loss carry-forward, the company said Thursday.

The Hawthorne toy manufacturer reported sales for the three months ended Sept. 28 of $328.1 million, compared to $294.3 million for the same period last year. Net income fell to $31.3 million from $41 million. But income before the carry-forward fell only slightly to $25.7 million from $26.4 million.

Results for all of fiscal 1984 were adjusted to reflect changes due to a restructuring a year ago that included a $231-million cash infusion and an exchange of stock for certain debt. Because of the changes, third-quarter sales last year were adjusted to $43.4 million, making the year-to-year decline 27.8%.

For the nine-month period, sales totaled $806.7 million, up 32% from $612 million. Income before the carry-forward was up 66.4% to $54.4 million from $32.7 million. Net income totaled $73.4 million, a 42.8% gain from $51.4 million last year. When results are adjusted to include the 1984 restructuring, however, net income rose only 5.3% from last year’s $69.6 million.