Mattel shares are tanking after its earnings but UBS still thinks its a buy MATGet the Full StoryMelia Robinson Business InsiderMattel stock is getting crushed today down more than 12 following a major earnings miss.
Mattel posted a loss of 32 cents a share almost double the 17 cents estimated by Wall Street analysts. Sales fell by 15.4 percent in the quarter ended March 31, to 735.6 million, missing estimates of 801.4 million according to Reuters.
Despite all that bad news, UBS reiterated its conviction in a "Buy" rating on Mattel.
Although sales of Mattel's most well-known brands, Barbie and Fisher-Price fell 13 and 9 during the quarter, UBS expects these brands to give Mattel a bump in the second quarter. UBS says that points of sale for Barbie are up high single digits, Hot Wheels up around high single digits and Fisher-Price up mid-single digits. Lead analyst Arpine Kocharyan explains:
These are surprisingly strong numbers, in our view - hard to reconcile with overall industry trends at retail, and with double-digit decline in shipment, potentially setting up for nice ship-in bump in Q2 under core brands, outside of entertainment slate-tied segments.
UBS notes the importance of Hot Wheels as one of Mattel's only bright spots, growing at 4.5 .
Some investors have been worried about a dividend cut coming for Mattel shareholders, UBS does not think a cut is likely.
For a real-time Mattel chart, click here.
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