swung to a first-quarter profit, but said sales were essentially flat.
According to generally accepted accounting principles, the company's quarterly profit was $32.8 million, or 7 cents a share, compared with last year's loss of $256.2 million, or 59 cents a share.P/>Total sales were $745.3 million, compared with $742 million in 2002. Mattel said revenue would have fallen 4% if it hadn't been for a weak dollar overseas.
"Many of the challenges we experienced last year, including a lackluster economy, low consumer confidence and the conflict in the Middle East, have continued, if not worsened, in 2003," said Robert A. Eckert, chief executive of Mattel.
Excluding items, the El Segundo, Calif.-based toy maker earned $40.8 million, or 9 cents a share, compared with $10.3 million, or 2 cents a share, in the prior-year period. Analysts were expecting 3 cents a share.
Meanwhile, J.P. Morgan downgraded the company to neutral from overweight, and the stock was down 6.7% at $21.09.
J.P. Morgan said in a research note that its downgrade is based on "significant share price appreciation over the past six months, difficult revenue comparisons in the back half of the year, a sluggish retail environment, as well as what could be a declining rate of margin improvement moving forward."