EL SEGUNDO, Calif. – Barbie maker Mattel Inc. said Friday that better sales of its classic toys over the holidays and cost-cutting helped its fourth-quarter profit rise 86 percent.
The No. 1 U.S. toy maker said sales of Barbie products rose 12 percent and Hot Wheels items were up 16 percent around the globe.
Mattel says it earned $328.4 million, or 89 cents per share. That compares with a profit of $176.4 million, or 49 per share, during the same period last year. Meanwhile, sales climbed 1 percent to $1.96 billion.
Analysts surveyed by Thomson Reuters expected the company to earn 68 cents on revenue of $1.98 billion.
The holidays are crucial to toy makers because they can make up to half of their annual sales during the quarter.
For the full year, Mattel earned $528.7 million, or $1.45 per share. That's a 39 percent increase from its 2008 profit of $379.6 million, $1.04 per share.
Full-year sales slipped 8 percent to $5.43 billion.
Mattel is based in El, Segundo, Calif. Its shares closed Thursday at $20.04.
WASHINGTON – Embattled Federal Reserve Chairman Ben Bernanke won confirmation for a second term Thursday, but only by the closest vote ever for the crucial post and after withering criticism from lawmakers for bailing out Wall Street while other Americans suffered in recession.
The Senate confirmed Bernanke for a new four-year term by a 70-30 vote, a seemingly solid majority but 14 votes worse than the closest previous vote for a Fed chairman.
President Barack Obama hailed the Senate's action and praised Bernanke's "wisdom and steady leadership."
The battle over Bernanke's confirmation has been a test of central bank independence, a crucial element if the Fed is to carry out unpopular but economically essential policies. Its decisions on interest rates can have immense consequences, from the success or failure of the largest companies to the typical home-buyer's ability to get an affordable loan to the price of cereal at the grocery or gas at the corner station.
Created by Congress in 1913 after a series of bank panics, the Federal Reserve is an independent agency, supposedly outside politics, but its chairman is typically assailed by lawmakers and others when the economy falls and jobless ranks lengthen.
"Bernanke fiddled while our markets burned," huffed Richard Shelby, of Alabama, the top Republican on the Senate Banking Committee, during Thursday's debate. "Ben Bernanke's Federal Reserve played a key role in setting the stage for the financial crisis."
Shelby and other opponents blame Bernanke for failing to spot problems leading up to the crisis, for lax bank regulation and for not cracking down on dubious home mortgage practices. All those missteps contributed to the recession, they contend.
Supporters see it far differently, crediting him with preventing the Great Recession from turning into the second Great Depression.
"The chairmanship of Ben Bernanke has in no small measure made it possible for this nation to avoid a catastrophe," said Senate Banking Committee Sen. Christopher Dodd, D-Conn.
Supporter Chuck Schumer, D-N-Y., worried that the bitter fight over the nomination would send "the message that the Federal Reserve and its monetary policy decisions are under the thumb of Congress. Businesses will be faced with the prospect that the Fed might not be able to do what's necessary for the economy because of pressure from Congress."
The vote on his confirmation came at nearly the last possible moment — Bernanke's current term expires Sunday.
The confirmation vote was preceded by a critical preliminary ballot to block a filibuster by opponents. He needed 60 votes rather than a simple majority and got 77, to 23 against. The closest previous final confirmation vote for a Fed chairman was 84-16 for Paul Volcker's second term in 1983 following another severe recession.
In the final vote, 11 Democrats and an independent joined 18 Republicans against Bernanke. They included senators facing potentially difficult re-elections this year, such as Democrats Arlen Specter of Pennsylvania and Barbara Boxer of California. Seven Democrats stuck with their party's majority on the vote to overcome the filibuster, but then switched to vote against confirmation. Both party leaders — Democrat Harry Reid of Nevada and Republican Mitch McConnell of Kentucky — voted to confirm. John McCain, the 2008 Republican presidential candidate, voted against him.
After Thursday's vote, Treasury Secretary Timothy Geithner said, "The Senate did the right thing. Chairman Bernanke will continue to play a vitally important role in guiding the nation's economy."
First appointed by President George W. Bush and then re-nominated by President Barack Obama, Bernanke found himself without a broad partisan constituency in the Senate.
"Although the Fed can print money, it can't print political capital," said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a consulting firm that advises financial institutions.
Bernanke's role in bailing out Wall Street has angered many Americans, who are still struggling under double-digit unemployment, stagnant paychecks, cracked nest eggs and record home foreclosures. In an election year in which the economy's health is still precarious, senators were hearing those complaints loud and clear.
"A vote for Ben Bernanke is a vote for bailouts," said Sen. Jim Bunning, R-Ky., a longtime critic.
Bernanke has especially upset lawmakers with his support of a $182 billion rescue of insurance giant American International Group Inc. Hefty bonuses to AIG executives and billions in payments to AIG's Wall Street partners added to the outrage. Criticism mounted as unemployment rocketed to 10 percent.
Bernanke advocates argue that the Fed chairman is being blamed for the failure of institutions over which the Fed had no authority. What's more, they say the countermeasures he took to intervene were exactly what Congress created the agency to do.
"Much of the anger directed at the Fed and the uncertainty regarding Bernanke's reconfirmation is terribly unfortunate — both because of the impact it might have on the central bank going forward, and also because much of the scorn is undeserved," said John Dearie, a former officer of the New York Fed now serving as executive vice president of the Financial Services Forum, an industry group.
The Federal Reserve acts as the "lender of last resort" to banks when they can't get money elsewhere. That's important for the nation's financial and economic stability.
Bernanke's confirmation comes as Congress is writing an overhaul of financial regulations aimed at avoiding another financial crisis. The chairman has had to defend the Fed against efforts to diminish its authority.
A House bill would remove its power to oversee consumer protections and would subject it to a sweeping congressional audit. A Senate bill seeks to create a separate consumer entity as well, and would create a single banking regulator that would also strip the Fed of its supervision of bank holding companies.
Bernanke has admitted making mistakes — including underestimating the threat of a booming housing market that eventually went bust and the resulting fallout to the economy. But he insist he has the tools, the know-how and the political backbone to safely steer the recovery from the worst recession since the 1930s. The biggest challenge facing Bernanke this year: deciding when and how to reverse course and boost interest rates to sop up the unprecedented money pumped out during the crisis. That's important to prevent an outbreak of inflation.
A scholar of the Great Depression, Bernanke, 56, spent most of his professional career in academia, including 17 years teaching economics at Princeton University. He came to Washington to take a job at the Federal Reserve, working with then-Chairman Alan Greenspan. Bush selected him to be his top economist. After that, he was sent to run the Fed starting in 2006.
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WASHINGTON – Toyota Motor Corp. said Thursday it's closing in on solutions to a gas pedal system problem, but it still had no details on when drivers would see repairs as an embarrassing recall spread to more than 2.4 million vehicles on three continents.
Toyota dealers in the U.S. have been swamped with calls from concerned owners but had few answers as the recalls snowballed. Elkhart, Ind.-based CTS Corp., which made the parts, is cranking out redesigned gas pedal assemblies that fix the problem, which is caused by condensation around an arm attached to the pedal and springs that send the pedal back to the idle position.
Toyota engineers are developing ways to repair the pedal systems in existing cars and trucks, said spokesman Brian Lyons.
No decision has been made yet on whether to repair the pedals or replace them altogether, he said, and he would not estimate how long it will take for customers to see action. Lyons says the automaker has not decided if the new pedals will go first to factories so production of eight models can resume or to dealers for modification of new cars on their lots and cars being driven by their customers.
Toyota on Thursday extended its recalls to China and Europe, deepening the massive recalls that threatened to undermine the reputation of the world's top automaker as a manufacturer of safe, durable vehicles.
The automaker has informed Chinese authorities it will start a recall in February for 75,500 RAV4 vehicles that were manufactured in China between March 2009 and January 2010, said Toyota spokeswoman Ririko Takeuchi. Toyota is still unsure how many vehicles could have the defect in Europe.
House lawmakers, meanwhile, said they intend to hold a Feb. 25 hearing to review the complaints of sudden unintended acceleration in Toyota vehicles. "Like many consumers, I am concerned by the seriousness and scope of Toyota's recent recall announcements," said House Energy and Commerce Committee Chairman Henry Waxman, D-Calif.
Earlier this week, the company said it was suspending U.S. sales and production of eight models — including the Camry, America's top-selling car — to fix faulty pedal systems that could stick and cause acceleration without warning. A week before the sales suspension, Toyota had issued a U.S. recall for the same eight models, affecting 2.3 million vehicles, even before the recalls in China and Europe.
Also this week, Toyota announced the recall of 1.09 million vehicles in the United States over concerns that floor mats could bend across gas pedals, causing sudden acceleration. That recall covered five models — 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe, a General Motors Corp. vehicle that shares parts with the Matrix. Those were in addition 4.2 million vehicles recalled in late 2009 over floor mat concerns. Some of the models in both recalls overlap.
CTS also makes pedals for Honda Motor Co., Mitsubishi Motors, Nissan Motor Co. and Ford Motor Co. in China, but the company said pedals made for those manufacturers don't have the same design. Still, Ford on Thursday halted production of some full-sized commercial vehicles in China because they contain CTS gas pedals.
CTS officials say they have ramped up production at three factories to manufacture redesigned pedals. The pedals are meant to solve problems with condensation that Toyota has said can cause them to react slowly when a driver presses on the gas. In rare cases, the gas pedals can get stuck.
CTS says it is also working with the Japanese automaker to find a potentially quicker repair for vehicles already on the road.
Lyons says the company's No. 1 priority is figuring out how to repair the largest number of vehicles in the shortest amount of time.
Repairs to the pedals still have to go through the normal durability testing to make sure they work properly, Lyons said. He would not estimate how long it will take for Toyota to decide on repairing versus replacement, nor would he say how long it will be until cars and trucks are fixed.
Toyota officials met Thursday with the National Highway Traffic Safety Administration to discuss a potential fix for the recalled vehicles, according to a person who was briefed on the meeting. The person, who was not authorized to speak publicly about the private meeting, said NHTSA officials discussed the potential remedy with Toyota and the government said they would express any concerns they may have about the proposed fix.
The automaker does not need NHTSA's specific approval but company officials do not want to proceed with a fix if the government has concerns about it. NHTSA has not signed off on any fixes at this point, the person said.
Since the initial recall last October, the company has held discussions with the government over the accelerator problem, and NHTSA was expected to review a possible remedy for the latest recall.
The sales suspension in the U.S. — Toyota's biggest market — could endanger the company's fledgling earnings recovery. Toyota only returned to the black for the July-September quarter with net income of 21.8 billion yen ($241 million) after three straight losing quarters.
"It is still uncertain how this recall problem will affect Toyota's profits. But investors are worried it could really pressure the company's overall earnings," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.
Fitch Ratings warned Thursday the massive recalls and sales suspension could dent Toyota's recovery, especially in the vital U.S. market.
Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.
"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.
In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.
But troubles persisted in other models, eventually leading to last week's U.S. recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.
Associated Press writers Yuri Kageyama and Shino Yuasa in Tokyo, Aoife White in Brussels Stephen Manning in Washington and Dee-Ann Durbin in Detroit contributed to this report.