Monday, April 21, 2008

Mattel's Miss and Quick Update

Mattel came out with a rather poor earnings report this morning, posting a 0.14 loss for the quarter with consensus estimates at a penny profit. The company is citing higher costs as a major reason for the shortfall, but they also mentioned Fisher-Price as another weak spot. Barbie sales being off 12% in the U.S. was also not good news. All of this is in spite of the positive impact on International sales due to the exchange rates.

I only quickly went through the earnings call transcript, so I am going to hold off on making any decisions. What's done is done for now. The big problem I have is that Hasbro did well for the quarter. I don't mind so much if an entire sector does poorly, because sometimes you can't help that. But, when your top competitor does fine and you fail, then there's something wrong, and there had better be an effective plan in place to take care of the situation.

Anyway, Mattel is down 8% to $20 a share at the moment. I'm down roughly 6.5% once we include the dividend payout I received late last year.

In other news, I increased my Manitowoc (MTW) position by two-thirds with a couple new buys since the large drop last week. The cost basis for the full position is now 38.65. I continue to like the company and believe there's upside given its current valuation. The position is full now, so there won't be any more buying of this name any time soon.

No comments: