Cost cuts see Mattel profits jump

Sales of Mattel's key Barbie dolls were down 15%

Cost cutting helped toymaker Mattel achieve an 80% jump in profits in the April to June quarter, despite a drop in sales and a strong US dollar.

Net profit was $21.5m (£13.3m), up from $11.8m a year earlier. Revenue fell by 19% to $898.2m, down from $1.1bn.

The results at the company, best known for its Barbie doll, were much better than analysts had expected.

The results come at the end of a week in which a number of major US companies reported strong quarterly results.

"If the company can grow earnings on a sales decline by cost-cutting, then what can they do when sales actually stop falling?" said Chris White at Wedbush Securities.

Mattel boss Robert Eckert said the decline in sales was caused by slowing demand during the economic downturn and the fact that fewer toys were geared towards summer film releases.

He also said the strong US dollar affected international sales.

Sales of Barbie dolls fell by 15%, while those of Hot Wheels, another of the company's best-known and most popular toys, fell by 10%.

Despite the rise in profits, Mattel said trading conditions in the second half of the year would remain challenging.