Demand for Barbie, Hot Wheels push Mattel profit up

Mattel Inc. says strong holiday demand for toys including Barbie, Hot Wheels and American Girl helped push its fourth-quarter net income up 14 percent.

The holiday quarter is crucial for toy makers, who can make up to half of their annual sales during the period.

Mattel, which is the No. 1 U.S. toy maker, reported Tuesday that its net income rose to $370.6 million, or $1.07 per share, for the period ended Dec. 31.

That's up from $325.2 million, or 89 cents per share, a year ago.

This beat the $1 per share that analysts polled by FactSet expected.

Mattel's chief rival, Hasbro Inc., reports its financial results on Monday.

Mattel's quarterly revenue edged up 1 percent to $2.15 billion from $2.12 billion, but missed Wall Street's $2.22 billion estimate. Mattel said that its performance was hurt a bit by unfavorable foreign currency exchange rates.

Gross sales dropped 2 percent in the U.S., but rose 5 percent overseas, this included a 3 percentage point drag from the unfavorable foreign exchange rates.

Barbie sales rose 6 percent in the quarter. Sales of for Mattel's Wheels segment -- which includes the Hot Wheels, Matchbox and Tyco R/Co brands -- increased 5 percent. American Girl sales climbed 4 percent, while sales for Fisher-Price fell 10 percent.

For the year, Mattel reported net income of $768.5 million, or $2.18 per share, up from $684.9 million, or $1.86 per share, a year earlier.

Annual revenue increased 7 percent to $6.27 billion from $5.86 billion.

"Mattel delivered another strong year, our third consecutive year of solid performance, which I am especially pleased about given the soft global economic backdrop and the highly promotional environment, particularly in the U.S.," chief executive Bryan G. Stockton said in a statement.

Mattel, based in El Segundo, Calif., is also raising its annual dividend by 35 percent. The toy maker will pay a first-quarter cash dividend of 31 cents per share on March 9 to shareholders of record on Feb. 23. Its annualized dividend is expected to be $1.24 per share. The prior-year's dividend was 92 cents per share.

The company said that its $680 million acquisition of HIT Entertainment, the company behind Thomas the Tank Engine and Bob the Builder, is expected to close on Wednesday. Mattel announced the deal in October. It will be the company's biggest acquisition in a decade.