Mattel Inc.'s shares rose more than 7 percent Monday after the toymaker reported lower fourth-quarter earnings that nevertheless beat analysts' expectations.

Shares of Mattel rose 6.9 percent to settle at $15.80 on Monday. They had climbed as high as $16.20 earlier in the day.

Mattel's fourth-quarter profit fell 1.8 percent to $279.2 million (69 cents per share), down from $284.3 million (68 cents a share) a year ago. Fourth-quarter sales dipped to $1.84 billion, from $1.85 billion a year ago.

Recognizing further weakness ahead, the company said it increased its share repurchase program by $250 million. It has paid $1 billion since 2003 to repurchase 56 million shares.

Harris Nesbitt analyst Sean McGowan raised his rating on Mattel to "outperform" from "neutral," claiming that at these prices, Mattel is undervalued.

However, year-end results displayed weakness in its Barbie and Hot Wheels brands. Global sales of Barbie fell 11 percent and Hot Wheels dipped 7 percent, while worldwide sales for its other brands, including American Girl, rose 23 percent.

Robert Eckert, the company's chairman and chief executive, said 2005 was "a challenging year for Mattel as we continued to experience extensive cost pressures and sales declines in the Barbie brand."

The company also announced that it has elected to its board Dominic Ng, chairman, president and chief executive of Los Angeles-based East West Bancorp Inc.

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