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updated: 7/13/2011 1:54 PM

Earnings Preview: Mattel 2nd-quarter results

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Associated Press

NEW YORK -- Mattel Inc., maker of Barbie and Hot Wheels toys, reports second-quarter results before the market opens on Friday.

WHAT TO WATCH FOR: How sales of "Cars 2" are going. The Disney/Pixar film, which was released June 24, should give Mattel, the nation's largest toy maker, a boost because it sells toys related to the movie. But some analysts say sales of "Cars 2" toys haven't been as robust as expected.

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Toy makers are facing rising costs for commodities like resin and fuel, which they are passing on to consumers with price increases. Another thing to watch: any comment on if retailers are ordering more products or remaining cautious.

Mattel is in the "early stages of cyclical growth," with improvements in its core brands like Barbie and Hot Wheels and solid new product introductions like its Monster High franchise and Sing-a-ma-jigs! dolls, said BMO Capital Markets analyst Gerrick Johnson. He rates the company "Outperform" with $32 price target.

WHY IT MATTERS: Consumers spending more on non-necessities like toys should bode well for any sustained economic recovery.

WHAT'S EXPECTED: Analysts expect earnings of 16 cents per share on revenue of $1.1 billion.

LAST YEAR'S QUARTER: The El Segundo, Calif.-based company reported net income of 6 cents per share on revenue of $1.02 billion.

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