Bearish Expectations For Mattel's Earnings

Shares of Mattel, Inc. MAT are trading down on Thursday afternoon, ahead of the announcement of the company’s second quarter financial results, scheduled for after the market close.

According to Estimize, earnings are expected to surge sequentially, while remaining, nonetheless, in negative territory. The Street is modeling a net loss of ($0.05) per share on revenue of $1 billion. Meanwhile, the crowd anticipates modeling a net loss of ($0.04) per share on revenue of $1.002 billion.

Despite implying a quarter-over-quarter amelioration, these estimates entail a marked decline from the earnings of $0.03 per share and revenue of $1.062 billion reported in the second quarter of 2014.

Moreover, a look at the chart above, which features a history of the evolution of sentiment, shows that both the Street and the crowd have become increasingly bearish on earnings as the report date approached.

Another thing that should be noted, in this case, from the first chart, is that Mattel has a history of falling short of expectations. So, a miss this quarter would come as no big surprise.

Short Interest Evidences Bearishness

Many investors look at short interest to determine the market sentiment related to a particular stock. Changes in short interest reflect changes in sentiment.

Related Link: Most & Least Shorted Stocks Ahead Of Earnings

In Mattel’s case, the approach of the earnings report triggered an increased bearishness among investors. Over the past week, the company’s short interest as a percentage of float surged to 11.47 percent. This figure positions the stock among the most shorted equities of companies reporting financial results this week.