World's largest toy manufacturer,
) is set to report third quarter 2013 results before the opening
bell on Oct 16. In the last quarter, it delivered a negative
earnings surprise of 34.4%. Let's see how things are shaping up
for this announcement.
HYATT HOTELS CP (H): Free Stock Analysis
MATTEL INC (MAT): Free Stock Analysis Report
TAKE-TWO INTER (TTWO): Free Stock Analysis
WYNN RESRTS LTD (WYNN): Free Stock Analysis
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Factors to Consider
Mattel's core Fisher-Price products were considerably down in the
first two quarters of 2013. Although Mattel will be launching
several products in the rest of 2013, they are expected to
contribute only marginally to 2013 sales thus having no material
impact on the third quarter. Further, persistent sluggishness in
its powerhouse brand, Barbie, also remains an overhang.
Of late, toy manufacturers have been highly affected by age
compression which is leading to a drift toward digital solutions
from traditional games, thus hurting toy sales. Limited consumer
spending also continues to affect the retail environment for the
Mattel also struggled on the revenue front in the last quarter.
While net sales nudged up 0.9% year over year, it fell shy of the
Zacks Consensus Estimate by 3.3%.
Mattel witnessed downward movement of estimates in the past 7, 30
and 60 days for the upcoming quarter as well as full year 2013.
The Zacks Consensus Estimate for the upcoming quarter declined
0.9% to $1.10 over the last 7 days.
Our proven model does not conclusively show that Mattel is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
The Expected Surprise Prediction or ESP for Mattel is -3.64%
since the Most Accurate Estimate stands at $1.06 per share, while
the Zacks Consensus Estimate is higher at $1.10.
Zacks Rank #4 (Sell) :
Mattel's Zacks Rank #4 when combined with a negative ESP makes
positive surprise prediction difficult. We caution against stocks
with Zacks Rank #4 and #5 (Sell rated stocks) going into the
earnings announcement, especially when the company is seeing
negative estimate revisions momentum.
Other Stocks to Consider
Other stocks in the broader consumer discretionary sector that
have both a positive earnings ESP and a favorable Zacks Rank are:
Take-Two Interactive Software Inc.
), with Earnings ESP of + 15.08% and Zacks Rank #2 (Buy).
Hyatt Hotels Corp.
), with Earnings ESP of + 13.64% and Zacks Rank #3 (Hold).
Wynn Resorts Ltd
), with Earnings ESP of + 8.81% and Zacks Rank #2 (Buy).