Mattel Inc, (NASDAQ:MAT) the US producer of toys, notably the iconic Barbie doll, has reported a first quarter loss for 2015 due to a losing popularity of its toys. This is a sixth consecutive quarter sales drop from its overseas sales outlets. US sales showed an increase of 8% but overseas sales a decrease of 14%.
The loss though is a narrow gain over what was expected – 8 cents per share compared to 9 cents per share as was expected for the Fortune 500 company. This is better than expected.
At the end of business on Thursday, April 16, Mattel’s shares rose by 6.7% to $26.95 on moderate volume.
The waning popularity of Mattel’s toys and dolls is a sign of consumer shifting tastes. Substitutes for the toys include electronic toys, tablets and merchandise from popular films such as Disney's "Frozen", along with competition from rivals Hasbro and Denmark's Lego. To regain competitive advantage, Mattel is looking to improving its creativity, innovative capability and speed to market.
We are already benefitting from better decision-making, alignment and enhanced accountability. And we’ve begun to refocus our culture on creativity, innovation and improving our speed to market. While we still have a lot of work to do, we’re starting to see progress with our core brands like Barbie and Fisher-Price, and I am confident we are making the changes necessary to perform better in the future.
Christopher Sinclair is replacement for the former CEO, Bryan Stockton, who was fired in January.
Mattel has also been in talks with Quirky, a company that turns ideas to business based on crowd sourcing. While the Quirky partnership could help give Mattel a fresh take on toys and possibly yield a hit or two, these partnerships often account for only a small part of the large companies’ overall businesses.
Netflix Inc., a provider of on-demand internet streaming media has posted quarterly revenue of $1.47 billion. The income met forecast estimates but was disappointing when averaged against its shares. Analysts had expected a profit of 69 cents per share on revenue of $1.57 billion. The disappointing profit statement was attributed to foreign exchange losses due to the strength of the American dollar in the first quarter of 2015.
Netflix also, on Thursday, announced a subscriber base of 62 million users worldwide for the quarter ended March. The market reacted, creating a surge of its shares by 11.6 percent to $530.90 dollars in after-hours trading. A positive 4.9 million new customers were added this quarter (2.6 million new subscribers from outside the US) in its nearly 50 international markets that include the United States, Europe, Australia and New Zealand.
The favorable market reception of its report and increased subscriber base, according to Chief Executive Officer Reed Hastings, is attributed to the streaming of fresh original content including the third season of "House of Cards" and new series "Unbreakable Kimmy Schmidt" and "Bloodline".
Chart. Netflix shares to date.
In a related development, FBR analysts Barton Crockett and Howard Ma, estimate that based on its demographic survey of streaming media in the US, the share price of Netflix is expected to go up to the $900 dollars mark with an increase in subscriber base to 180 million, with 60 million from the US alone.
Netflix is also seeking shareholder approval for an increase in authorized shares. In its report, the company said it will recommend a stock split to its Board pending shareholder approval. The company also announced that it will soon be using the HTTPS protocol to authenticate and encrypt customer streams in a move that will enhance customer privacy and security online, and as a means to thwart man-in-the-middle attacks that hijack a huge chunk of internet traffic.
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