One day after Mattel Inc. reported its third-quarter profit fell 12 percent, Standard & Poor's cut the El Segundo-based toymaker's short-term credit rating to one level short of junk status.
On Tuesday, S & P; lowered Mattel's short-term rating to A-3 from A-2, citing "concerns about the company's business fundamentals that outweigh its good liquidity and cash-generation characteristics."
S & P; also downgraded its long-term outlook on Mattel, to negative from stable based on falling profitability and increased business risk from the continuing decline in sales for Barbie, Mattel's largest and most profitable product line.
Mattel reported Monday that third-quarter sales of Barbie were down 30 percent from last year, while sales of its other products such as Hot Wheels, Fisher-Price and American Girl, rose.
Mattel's net income for the July-September period was $225.3 million (55 cents per diluted share), compared with $255.8 million (61 cents) for the year-ago period.
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