* Second-quarter adj. profit $0.03/share vs est. $0.18
* Sales fall 9 pct to $1.06 mln vs est. $1.19 bln
* Barbie sales fall 15 pct
* Shares fall as much as 7.5 pct (Adds analyst comment, updates shares)
By Shailaja Sharma
July 17 (Reuters) - Mattel Inc, the world's largest toymaker, reported its third straight fall in quarterly revenue as sales of its iconic Barbie doll declined the most since mid-2009.
Shares of the company, which also makes Fisher-Price and Hot Wheels toys, fell as much as 7.5 percent on the Nasdaq on Thursday.
A lack of innovation and other problems have hampered Mattel's growth, Piper Jaffray analyst Stephanie Wissink said.
"(Mattel) has overly relied on its capital muscle and not on its innovation intellect to really build consumer following," Wissink said.
Mattel's inventories jumped after weak sales in the 2013 holiday shopping season. The company's efforts to unload inventory through discounts met with little success as customers cut back on spending.
Mattel's inventory was $885.4 million as of June 30, up 36 percent from March 31 and 56 percent from Dec. 31.
Rival Hasbro Inc, meanwhile, is seeing strong demand for its action figure toys such as "Transformers" and "Spider-Man," driven by the release of new films.
Hasbro also made strides in mobile gaming by buying a 70 percent stake in mobile games maker Backflip Studios this month.
Mattel's sales too have benefited from its new toys based on Disney's recent film "Frozen," but Wissink said this was at the cost of Barbie and Monster High dolls.
Mattel's push into toys such as building blocks has so far not helped it overcome the fall in demand for its decades-old toys as children shift to electronic games and tablets.
Barbie sales, which fell 15 percent in the second quarter, have declined in eight of the past 10 quarters.
Analysts estimate Barbie contributes more than $1 billion to Mattel's annual sales, or about 15 percent of total sales in 2013. Mattel does not break out Barbie sales separately.
Fisher-Price toy sales fell 17 percent.
Excluding Barbie, sales of girls' dolls fell 11 percent, mainly due to weak demand for Monster High dolls, which were launched in 2010 and are based on the children of monsters such as Dracula.
Mattel acquired Canada's Mega Brands Inc in April for $423 million to enter the building blocks market that is dominated by Denmark's Lego.
Mattel's net income more than halved to $28.3 million, or 8 cents per share, in the quarter from $73.3 million, or 21 cents per share, a year earlier.
The earnings included a tax benefit of 11 cents per share and the negative impact of 6 cents per share from costs related to the acquisition of Mega Brands.
Excluding these items, Mattel earned 3 cents per share.
Net sales fell 9 percent to $1.06 billion, including $61.6 million in sales from Mega Brands.
Analysts on average had expected earnings of 18 cents per share on revenue of $1.19 billion, according to Thomson Reuters I/B/E/S.
Mattel's shares were down 6.6 percent at $36.47 at midday. (Additional reporting by Siddharth Cavale in Bangalore; Editing by Kirti Pandey)