Mattel disappoints analysts but Hasbro tops expectations

Mattel, which makes toys such as Barbie dolls and Fisher-Price products, said it lost $46.6 million, or 13 cents per share in the first quarter, while analysts expected net income of a penny per share.

Higher product costs and legal fees hurt results.

Lehman Brothers analyst Felicia Hendrix said results were mixed. Domestic Barbie sales continue to decline, but High School Musical toys showed strength. Also, shipments ahead of the "Speed Racer" movie and American Girl sales helped counter negative Fisher-Price results.

"While we believe these positives are notable in this overall disappointing quarter, we remain neutral on Mattel until we can see some consistent growth in the company's core, underlying properties," she wrote on Monday.

Meanwhile, Hasbro, which makes Transformers and Littlest Pet Shop toys, said profit rose 14 percent to $37.5 million, or 25 cents per share, while analysts expected just 14 cents per share. Results were helped by strong revenue, which rose 13 percent to $704.2 million.

"Hasbro reported solid, clean first-quarter results," said Hendrix, who rates Hasbro "Equal Weight." "The company has begun this year of high expectations (given management's continued reiteration that revenue and earnings should grow in 2008 despite an extremely strong 2007) on a very strong note."

Hasbro shares rose $2.35, or 7.5 percent, to $33.90 during morning trading, after earlier reaching a 52-week high of $35.07. Mattel shares, meanwhile, fell $1.79, or 8.2 percent, to $19.99.

Shares edged down across the rest of the sector.

Jakks Pacific Inc. fell 3 cents to $28.86. Leapfrog Enterprises Inc. dipped 2 cents to $8.27.