World's largest toy manufacturer,
) is set to report fourth quarter and full year 2013 results
before the opening bell on Jan 31, 2014. In the last quarter, it
delivered a positive earnings surprise of 5.45%. Let's see how
things are shaping up for this announcement.
Factors to Consider
After being considerably down in the first two quarters of 2013,
sales at Mattel's core Fisher-Price products were flat year over
year during the third quarter. Results in the upcoming quarter
are likely to improve driven by solid product line-up, strategic
association with entertainment companies and expansion into the
However, although Mattel launched several products in 2013, they
are expected to contribute only marginally to 2013 sales.
Moreover, the company is likely to be 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
Our proven model does not conclusively show that Mattel Inc. 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.
Positive Zacks ESP:
Expected Surprise Prediction or ESP, which represents the
difference between the Most Accurate estimate and the Zacks
Consensus Estimate, stands at +0.83%.
Zacks Rank #4 (Sell):
Mattel Inc.'s Zacks Rank #4 when combined with a positive ESP
makes 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:
Bally Technologies, Inc.
), with an Earnings ESP of + 4.90% and a Zacks Rank #1 (Strong
Multimedia Games Holding Company, Inc.
), with an Earnings ESP of + 10.35% and a Zacks Rank #2
Lions Gate Entertainment Corp.
), with an Earnings ESP of + 14.55% and a Zacks Rank #3 (Hold).
BALLY TECH INC (BYI): Free Stock Analysis
LIONS GATE ETMT (LGF): Free Stock Analysis
MATTEL INC (MAT): Free Stock Analysis Report
MULTIMEDIA GAME (MGAM): Free Stock Analysis
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