by Ian Harvey
October 27, 2017
Mattel, Inc. (NASDAQ:MAT)
Here is an overview of Mattel, Inc. (NASDAQ:MAT)’s winning options put trade after reporting earnings. This options trade was recommended yesterday, Thursday, October 26, 2017, before the market opened, in the recommendation for members of Stock Options Made Easy -- “Option Trade - Mattel, Inc. (NASDAQ:MAT) Puts”; producing great profits within 24 hours of executing the trade!
Leading toy-maker, Mattel, Inc. (NASDAQ:MAT) is scheduled to report third-quarter 2017 results today, October 26, after the market closes. Analysts expect Mattel to post earnings of $0.62 per share for the quarter.
Mattel’s last quarterly earnings results saw the company report ($0.14) earnings per share for the quarter, missing analysts’ consensus estimates of ($0.09) by ($0.05). The company had revenue of $974.50 million during the quarter, compared to analyst estimates of $972.36 million.
Monday was a discouraging day for the toy makers after Hasbro warned that the holiday period would have a bad effect on its sales growth because of key retailer Toys "R" Us declaring bankruptcy. Mattel couldn't help but feel the burn of the news.
Consumer spending uncertainty in the United States as customers restrain their non-essential purchases, along with overall challenging macroeconomic environment are a threat to Mattel's top-line growth.
Yet, Mattel's continual efforts to improve point of sale through launch of new products along with its incremental licensed entertainment portfolio are unlikely to drive third-quarter results. Also, increased focus on building its Power Brands (American Girl, Barbie, Fisher-Price, Hot Wheels and Thomas & Friends) into 360-degree connected systems of play and experiences are not anticipated to bolster results in the to-be-reported quarter……..read more……
** OPTION TRADE: Buy the MAT NOV 17 2017 15.000 PUT at approximately $0.60.
Mattel reported $0.09 earnings per share for the quarter, missing the consensus estimate of $0.62 by ($0.53). Mattel had a return on equity of 11.62% and a net margin of 4.51%. The company had revenue of $1.56 billion during the quarter, compared to analyst estimates of $1.82 billion. During the same period in the prior year, the business earned $0.70 earnings per share. Mattel’s quarterly revenue was down 13.1% on a year-over-year basis.
This downturn was due to negative impact of the Toys "R" Us bankruptcy filing, tighter retailer inventory management and challenges with certain underperforming brands. In fact, Mattel also reported lower-than-expected sales in nearly every toy brand and category in the quarter.
"Our Q3 performance was clearly disappointing, led by compression in North America driven by Toys 'R' Us filing for bankruptcy, tighter retailer inventory management and challenges with certain underperforming brands," said Margo Georgiadis, CEO, in a press release.
Shares of Mattel declined over 19% in after hours trading on Oct 26, after the company reported weak results in the third quarter of 2017.
The weaker-than-expected results are the latest concern for this toy maker, who named its third chief executive in as many years earlier this year in an endeavor to turn the company around.
Nevertheless, following the disappointing results, Mattel now plans to cut $650 million in costs over the next two years. Also, the company has suspended its quarterly dividend of 15 cents beginning in the fourth quarter of 2017 to augment financial flexibility, fortify balance sheet and facilitate strategic investments.
Thursday morning, MAT shares were trading at $15.45.
Friday, saw MAT as low as $12.71.
ACTION TO TAKE…….
As you would have by now realized, many of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but during earnings season this strategy has been very profitable.
Our approach is to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.Our proven track record says it all!!
Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.
What To Do Now…….
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