Mattel’s Profit, Barbie’s U.S. Sales Up

U.S. children gave Barbie a little love and the tax man handed over a big gain in the first quarter, helping toy maker Mattel Inc. post a hefty increase in net income Tuesday.

But Mattel said its iconic doll remained stuck in a two-year sales slump internationally, and the El Segundo company reported a $32-million operating loss, which included $13 million in severance charges because of recent layoffs.

Mattel’s net income rose to $30.2 million, or 8 cents a share, from $6.5 million, or 2 cents, thanks to tax benefits of nearly $57 million, or 15 cents a share, from settling foreign audits. Not counting the tax gains, Mattel lost 7 cents a share. Analysts had expected operating profit of 1 cent a share, according to a survey by Thomson Financial.

Overall sales rose 1% to $793.3 million.

Barbie sales in the U.S. inched 1% higher than in the first quarter of last year -- the first such good news for the company in more than a year, Mattel Chief Executive Robert Eckert said in a conference call with analysts.

“We’re not out of the woods yet, but I do feel better about where we are than I have for the past nine months,” Eckert said. “It’s clearly better than another quarter of decline.”

Barbie has yet to win the world over. Her global sales were down 8%, including a 3-percentage-point hit from currency exchange rates, Mattel Chief Financial Officer Kevin Farr said.

Other Mattel products had mixed results. Sales of Hot Wheels and other toy cars were down 4%, revenue at American Girl dropped 9% and its Fisher-Price business saw sales increase 16%.

Mattel plans to increase prices as much as 3% on some items to offset increased costs for plastic, which is tied to oil prices, Eckert said.

Mattel’s stock closed at $16.62, down 3 cents.

Eckert declined to give a financial forecast during the conference call, but analyst Tim Conder at A.G. Edwards & Sons Inc. said the first-quarter results, which came after Christmas price-cutting, weren’t a surprise. And Conder wasn’t ready to give up on the Barbie brand, which has been losing ground to Bratz dolls and other toys.

“Bratz has been a thorn in their side and has been for some time, so they’re still facing some challenges, but this is a work in progress,” Conder said. “From a seasonal basis, the first-quarter report isn’t the most significant. It’s not something to get too excited about or too depressed about, either.”