Mattel Inc.’s third-quarter profit jumped 6% as Barbie sales and early shipments of TMX Elmo help fuel a turnaround at the world’s largest toy manufacturer.

The El Segundo, Calif., toy manufacturer reported Monday net income of $239 million, or 62 cents a share, up from $225.3 million, or 55 cents a share, a year earlier.The results beat analysts’ expectations and pushed the toy maker’s stock price up 95 cents or 4.6%, to $21.65 in recent trading.

Mattel said its quarterly sales came in at $1.79 billion, up more than 7%. Currency translations accounted for one percentage point of the sales growth, Mattel said.

Analysts, on average, had been looking for Mattel to earn 61 cents a share on revenue of $1.63 billion.

Meanwhile, operating income for the latest quarter amounted to $322.2 million, up from $308.8 million a year earlier, as the company experienced an improvement in gross margin — to 47.6% from 45.7%.The most recent results indicate favorable business as Mattel heads into the all-important holiday shopping season.

“We had good performance across our portfolio,” said Robert Eckert, chairman and chief executive, in a statement.

The strong results marked another strong quarter for Mattel which moved into the black in the second quarter after the company reversed losses from the prior year due to the success of summer-entertainment toy lines such as “Cars” and “Superman Returns.”

Mattel had been struggling with a difficult retail environment, cutthroat competition and high raw-materials costs while attempting to hang on to market share as children leave the toy aisle at younger ages. Last year, the company announced a reorganization of the Mattel group in order to streamline its core toy business as part of its turnaround strategy initiated in 2000.

The “turnaround is gaining some momentum now,” said Sean McGowan, an analyst at Wedbush Morgan Securities, adding that both top line and bottom line results at the company were better than expected.

The third quarter was the “best quarterly performance year-over-year in probably three years,” Mr. McGowan said. The analyst doesn’t own Mattel stock and his firm has no banking relationship with the company.

Mattel’s Chief Financial Officer Kevin Farr said during an analyst conference call Monday that the third quarter marked the first increase in gross margin in two years. “We’re not where we want to be from a historical perspective, however, over the long-term, we believe that our brands can generate margins consistent with well-run consumer product companies,” he said.

TMX Elmo, the 10th-anniversary incarnation of the red Sesame Street character, is the single biggest preship launch before the holidays in Mattel’s history. The toy has created a buzz in the wider toy industry and is leading to earlier holiday shopping. It’s also becoming the hardest toy to find this season.

Barbie, Mattel’s flagship business, was rejuvenated by the Barbie and Twelve Dancing Princess lines. Toys based on the “Cars” animated feature film also have been selling well.

Worldwide gross sales for Mattel’s girls and boys brands business unit were $1.08 billion in the latest quarter, up 8%. Sales for the Barbie brand were up 1%.

“The Barbie business continued to show encouraging signs of stabilization, with U.S. sales increasing for the third consecutive quarter,” Mr. Eckert pointed out.

Ryan Beck & Co. analyst Margaret Whitfield told clients last week she expected good news from Mattel.

“The backdrop of strong innovation, including electronic content to keep kids involved in toys longer, along with an improved economic climate and strong early sales of high-ticket items in September, augurs well for the industry this year,” Mrs. Whitfield wrote in a research note.

Separately, as a result of Mattel completing a review of its stock-option practices, the latest quarter’s net profit included $19 million of non-cash compensation expense on a pretax basis due to accounting errors related to certain option grants made prior to 2003. The per-share equivalent worked out to three cents a share.

Mattel said the review found there wasn’t any backdating of stock-option grants, any misconduct or manipulation associated with stock option grant dates, any intentional deviations from generally accepted accounting principles, or any material inaccuracies with respect to the current or historical financial statements of the company.

Mattel completed the $230 million acquisition of Radica Games Ltd., maker of electronic toys, on October 3. The acquisition thus wasn’t included in Mattel’s third-quarter results.