LOS ANGELES (AP) -- Mattel Inc. posted a 15 percent gain in fourth-quarter profit, even though it entered the crucial holiday season in the shadow of negative publicity over its recalls of millions of Chinese-made toys tainted with lead.
The company said Thursday that tax gains and strong international sales of Hot Wheels and other toys helped offset the cost of the recalls.
Still, the world's largest toy maker warned that it expected to rack up additional costs in 2008 as a result of the recall problems.
"There're going to be sizable legal costs this year," Robert A. Eckert, Mattel's chairman and chief executive, said during a conference call with Wall Street analysts. "We have a lot of litigation around the world on things related to product recalls, and we've got a significant case coming to trial this year."
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