You could hear Charlie-in-the-Box, Bird Fish, and all the other abandoned residents of the Island of Misfit Toys cheering Mattel's (NYSE: MAT) earnings results today. After a brutal year of recalls and bad press, the tarnished toy maker reported fourth-quarter earnings that rose 15% over last year, on sales of $2.2 billion.

That had to be something of a relief, considering the doom and gloom that some analysts (including myself) expected to hear from the toy maker for the Christmas selling season. But though the numbers look better than we might have expected, there wasn't much of a thaw domestically.

Mattel said that while sales rose nearly 4% overall, they were off 3% domestically. Half of the 18% growth in international revenues came from currency exchange rates. That seems to suggest that while consumers have the attention span of the kids for whom they're buying toys, they didn't completely forget the reasons behind the seemingly unending parade of toy recalls.

A 3% drop for domestic sales might not seem egregious, but compared to last year's 15% jump in domestic toy sales, it represents a significant decline. It also doesn't help that the reigning queen of dolls, Barbie, declined 12% domestically, with CEO Bob Eckert calling the doll's performance this year "a disappointment." Mattel has been having trouble lately positioning its toys amid tough competition.

In two weeks, rival Hasbro (NYSE: HAS) will provide its fourth-quarter tally, and analysts are pretty upbeat about the prospects. The toy maker has been able to avoid the taint of lead-related recalls -- it has had handfuls of recalls for other reasons -- and forecasts are for a 30% increase in profits on a 9% increase in sales to $1.2 billion. With its purchase of Cranium and the release of a toy from the recent hit movie Cloverfield -- the company describes the figure in a press release as "a highly detailed representation of the beast" that wreaks havoc on New York City in the movie -- Hasbro looks like it is continuing to sidestep major problems.

Importantly for Mattel investors, though, it seems that consumers have largely put the recall issue behind them. Any company may have a recall in a given year, but the rapid succession with which they arrived last year, and the zeal with which some people searched for any reason to link a problem to Chinese-made products, made Mattel the poster child for the industry's ills.

Shares have bounded up from the lows they hit two weeks ago, and Mattel seems to be priced at a small premium to RC2 (NASDAQ:RCRC ) and Hasbro. However, I think Mattel and RC2 have better prospects going forward, which could leave investors in these two companies happily singing "We're a Couple of Misfits."

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