Mattel Eclipses GM in Value on Toy-Car Gains: Chart of the Day

By Jeff Green and Heather Burke

July 4 (Bloomberg) -- Mattel Inc., helped by rising sales of Matchbox and Hot Wheels toy cars, has a larger market value than General Motors Corp. for the first time as record U.S. gasoline prices crimp sales of real cars and trucks.

GM shares fell to the lowest since 1954 this week after an analyst said bankruptcy was ``not impossible'' if the auto market continues to deteriorate. GM's U.S. unit sales fell 18 percent in June. The chart of the day shows a comparison of the change in market value for Mattel and GM.

Mattel is surpassing GM even after the toymaker reported its first quarterly loss in almost three years in April, a reflection of the diverging outlook for the two companies. Mattel may return to profitability after the first quarter, while GM will probably report losses through 2009 as buyers spurn pickup trucks and sport-utility vehicles, analysts said.

``Hot Wheels and Matchbox are basic, low-priced toys, so they appeal to consumers, in the U.S. and especially in less affluent countries, who may not be able to afford more expensive toys,'' Sean McGowan, a toy analyst at Needham & Co. in New York, said yesterday in an e-mail. He recommends buying Mattel shares.

GM, the world's largest automaker, rose 14 cents, or 1.4 percent, to $10.12 in New York Stock Exchange composite trading yesterday after a JP Morgan & Chase Co. analyst said GM has ``tough but manageable'' liquidity options. Mattel rose 8 cents to $17.22.

Mattel briefly passed Detroit-based GM in market value for the first time June 26 and regained its lead July 2. El Segundo, California-based Mattel is the world's biggest toymaker.

GM, turning 100 this year, reported its largest annual loss in 2007, $38.7 billion, after a tax accounting change, and hasn't had a profitable year since 2004. The carmaker's U.S. market share hovers at the lowest level since 1925, and last year GM was 3,000 cars away from being dethroned by Toyota Motor Corp. as the world's largest automaker.

Mattel said first-quarter revenue from toy cars rose 15 percent. The company had a $46.6 million loss in the quarter as Chinese manufacturing costs rose. The maker of Barbie dolls hasn't had an annual loss since 2000.

To contact the reporters on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net; Heather Burke in New York at hburke2@bloomberg.net.