Mattel posts 1Q net loss due to China costs

Mattel posted a net loss of US$46.6 million in the first quarter because of higher manufacturing costs in China, its first such result in nearly three years, Bloomberg reported. In the first quarter of 2007, Mattel, the world’s biggest toy manufacturer, reported a US$12 million net profit. The company said Chinese labor costs and other manufacturing expenses would continue to increase. The price of oil is also causing Mattel’s costs to rise, because it uses an oil byproduct, plastic resin, to make its toy figures. It said it would raise prices around June 1. Mattel spent US$110 million last year, including legal, advertising, and testing costs, on product recalls of more than 21 million China-made products. Some recalled toys were coated in paint that contained excessive amounts of lead, while others had detachable magnets that were dangerous if accidentally swallowed.