Toymaker took charge due to recall
Toymaker Mattel Inc. on Tuesday reported a 69% drop in fourth-quarter earnings.
Contributing to the results was a $31 million charge to cover costs associated with the recall of up to 10 million battery-run Power Wheels ride-on toys because they posed a serious fire risk, and litigation settlement over a Federal Trade Commission dispute involving Toys ‘R Us.
The El Segundo, Calif.-based company, behind the Barbie and Hot Wheels brands, said it earned $59.5 million in the fourth quarter ended Dec. 31, compared with $195 million in the same period a year ago.
Sales were $1.5 billion, down from $1.6 billion a year earlier.
Mattel’s results were in line with Wall Street analysts’ estimates. The company warned of lower earnings in December after many retailers cut back their orders and requested earlier delivery times of shipments in order to fill shelves before the Christmas rush.
Shares of Mattel inched up $0.31 Wednesday to close at $25.38.