MARVEL RELEASES Q3 2007 NUMBERS

[MattBrady]

Marvel today released its numbers for the 3rd quarter of 2007 and for the nine months ending September 30th, 2007. Overall, the company’s third quarter results were nearly triple that of one year ago, based largely on licensing from Spider-Man 3.

By division, Marvel saw net sales of: $66 million in licensing (compared to $28.3 million in Q3 2006) - $24.2 million accountable to Marvel’s joint venture with Sony to license Spider-Man 3; $34.9 million in publishing (compared to $30.9 million in Q3 2006); and $22.7 million in toys (compared to $33.0 million in Q3 2006). The gains allowed net income for the quarter to increase to $36.3 million (45 cents per share), compared to a net income of $13.2 million (16 cents per share) a year ago. Wall Street analysts were expecting 28 cents per share.

Also, sales were up 34% to $123.6 million compared to $92.2 million a year ago, and against a predicted $92.2 million from analysts.

From Marvel’s release:

Marvel's Chairman, Morton Handel, commented, "Marvel achieved strong operating results across all its businesses for the third quarter and nine months ending September 30, 2007. Licensing segment results benefited from strong contributions related to Spider-Man 3 consumer merchandise licensing. The publishing segment continues to benefit from strong sales of event-driven imprints such as World War Hulk and Stephen King's Dark Tower series. Finally, our toy license agreement with Hasbro yielded an improved operating income contribution in the 2007 periods, largely due to fees from Spider-Man 3-based products.

"We are excited by the progress on our Iron Man and Incredible Hulk feature films for next year and the growing retail and consumer product support for these properties. We are also focused on tapping the potential of Marvel properties online, and are poised to unveil the first stage of that evolution by the end of 2007."

By company segment:

Licensing

Licensing Segment net sales more than doubled in Q3 2007 to $66.0 million compared to Q3 2006, primarily due to continued strength from Marvel's Spider-Man merchandising joint venture (JV) with Sony. Supported by the May 2007 release of Spider-Man 3, the JV contributed revenues of $24.2 million in Q3 2007, compared to JV revenues of $0.8 million Q3 2006. Licensing segment net sales also benefited from the settlement of various audit claims totaling $16.8 million in Q3 2007, which were predominantly recorded in the Marvel Studios division. Operating margins increased in the Licensing segment to 69% in Q3 2007 from 61% during Q3 2006 due to higher overall sales, the higher weighting of Spider-Man JV revenues and the benefit provided by the settlement of the audit claims.

Publishing

Marvel's Publishing Segment net sales increased $4.0 million or 13% to $34.9 million in Q3 2007 principally due to continued strength in the Direct and Mass Market channels and the benefit of special event publishing such as World War Hulk and Stephen King's Dark Tower series. Operating income in the publishing segment rose to $15 million with an operating margin of 43% in Q3 2007 compared to an operating margin of 42% in Q3 2006.

Toys

Marvel reported Toy Segment net sales of $22.7 million in Q3 2007, a decrease from revenues of $33.0 million in Q3 2006. The decrease was primarily due to the transition from toys produced by Marvel in 2006 to toys principally licensed to and produced by Hasbro, Marvel's master toy licensee, in 2007. Margins improved sharply in the Toy Segment in Q3 2007 to 61% from 22%, reflecting the higher-margin nature of license income recorded in 2007. This compares to Q3 2006 revenues, which were largely comprised of wholesale sales, subject to a corresponding cost-of-revenues expense.

Film Production

Marvel reported Film Production segment operating costs of $1.2 million for Q3 2007, which consist primarily of employee compensation and the expenses associated with a portion of the Marvel Studios office in California, partially offset by changes in the fair value of Canadian Dollar forward contracts related to The Incredible Hulk filming in Canada.

As usual, Marvel updated its Marvel Studios schedule, which no major changes in its upcoming films. Given it’s projections, 2008 will be another busy year for Marvel at the theaters, with Iron Man (5/2/08), The Incredible Hulk (6/13/08), and Punisher 2 all slated for release during the year.

X-Men Origins: Wolverine is slated for a 5/1/09 release.

The animated Wolverine and the X-Men is slated for a fall 2008 release, as is an animated Iron Man series, with a Hulk animated series in development. The Spider-Man animated series is still slated for a Spring 2008 launch.

Upcoming direct-to-DVD releases include Next Avengers (July 2008); Hulk Smash (October 2008), Thor (April 2009), and a yet-unnamed project slated for a September 2009 release.

Spider-Man: The Musical is listed as still being in development.

Both the Iron Man and Hulk films will see video game releases in 2008 as well from Sega.

As a result of this news, Marvel raised its financial guidance for 2007,from a revenue of $455 million to $475 million. Previously, the company had forecast a revenue of $375 million to $435 million.

[spidertour02]

hamana hamana hamana ...

Marvel sure has come a long way from bankruptcy!

[HartyPotter]

Good news all around!

[JohnLynch]

This is all Joe Q's fault! When is Marvel going to wake up and replace him?


Oh, wait.

[monkeybob]

Bah. When shall these profits be passed along to me, the loyal fanboy, in the form of lower cover prices... or at least some Free Comic Book day books that aren't reprints I've already bought.

Oh, wait, they did that last FCBD.

OK, where's my lower cover prices?

[Hypestyle]

Originally Posted by monkeybob

Bah. When shall these profits be passed along to me, the loyal fanboy, in the form of lower cover prices... or at least some Free Comic Book day books that aren't reprints I've already bought.

Oh, wait, they did that last FCBD.

OK, where's my lower cover prices?

I don't see it happening. I wish it would, or at least, a different approach to selling new comics:

they could package "families" of books, and put 3-4 new issues together, and sell them for, say, $4.50..

[Slick]

Originally Posted by Hypestyle

I don't see it happening. I wish it would, or at least, a different approach to selling new comics:

they could package "families" of books, and put 3-4 new issues together, and sell them for, say, $4.50..

That happens over here and in the UK for reprints.

Trust me, not a happy format to be using for new material

[hhbx]

Originally Posted by monkeybob

OK, where's my lower cover prices?

Bah! Never going to happen. There making this much money from the way the current pricing is, why print more books and get the same amount of money coming in?

[Mek]

Hold up: did the 'Thor' live-action movie get nerfed into a DTV-budget project or is this a separate, animated feature?

Come to think of it, what was the number of animated movies Lions Gate was making for Marvel anyways?

[Tom Daylight]

I'd like lower prices... I'd buy more comics if the prices were lower...

[Mek]

Wait, I looked over at ToonZone and the 'Thor' movie listed here is indeed an animated one.

Lord, I think I'd choke on my own saliva if Beta Ray Bill was done justice in the animation format.

[EmeraldGuy32]

dude, I was wondering why my stock jumped so damn much today...good lord!

[juststoney]

Originally Posted by Hypestyle

I don't see it happening. I wish it would, or at least, a different approach to selling new comics:

they could package "families" of books, and put 3-4 new issues together, and sell them for, say, $4.50..

Don't they already do that with Marvel Two-In-One and some of the Ultimate magazines that reprint issues?

[LikeaPhoenix]

Hmmm, interesting. There was no mention of the FF:RoTSS. So, the not-so-well-received movie didn't contribute to Marvel's 3rd quarter earnings in terms of licensing and toys, at all?

[artiepants]

Originally Posted by monkeybob

Bah. When shall these profits be passed along to me, the loyal fanboy, in the form of lower cover prices... or at least some Free Comic Book day books that aren't reprints I've already bought.

Oh, wait, they did that last FCBD.

i think they did it the year before too (runaways/X-men one shot)...

while it'd be great if the lowered prices ($2.50 really seems like the perfect price to me in this day-and-age...) I'd feel happy if they are able to maintain $2.99, cuz i'm not paying more

[Sano]

Good news MAAANG loving Spidey 3 on Blu-ray, I got the Blu-ray trilogy pack and got all of the movies including Spidey 2.1 for my PS3 watching pleasure!

Now they need to get cracking on Spider-Man 4 where Curt Conners becomes the Lizard and Spider-Man grows four extra arms ah yeah that's what I'm talking about right there! Like that dude from Perfect Hair Forever said, "FUND IT!"

[sweetmisery]

Wow. And to think a decade ago, they were facing bankruptcy. This is how you do business!

[KingPagla]

Originally Posted by EmeraldGuy32

dude, I was wondering why my stock jumped so damn much today...good lord!

Hells yeah, and it's about time too! Ka-Ching!

4.72 (20.25%)!!!!!!!

[i_use_tp]

A simple price change from $2.99 to $2.50 would surely cause some sort of increase in their publishing sales.

And when will Canadian prices drop to at least the equivalent of American prices? Our dollar is now worth more.

[Lars]

Originally Posted by JohnLynch

This is all Joe Q's fault! When is Marvel going to wake up and replace him?


Oh, wait.

Just pointing out that as Editor In Chief, Joe Q has little if anything to do with liscensing etc. His is on comics. Which, by the way, did pretty dang well...

[ZeoVGM]

Word to lower comic prices.

I'd be fine with 2.49 even. It doesn't need to be 2.99. :[

[Skatonic10]

Upcoming direct-to-DVD releases include Next Avengers (July 2008); Hulk Smash (October 2008), Thor (April 2009), and a yet-unnamed project slated for a September 2009 release.

Sweet! Animated Hulk and Thor movies

[Gamma Charge]

Hulk sequel and an animated movie next year, a new video game, and an animated series in development. It's a pretty good time to be a Hulk fan. Just a few years ago I had dropped Hulk and wondered when he'd get his due. This is one happy fanboy.

Thor animated movie next year on top of the live action film in development? Sweet. Hopefully the both do well, and maybe we can see BRB pop up in a future animated Thor movie.

Now I hope that the adaptions don't end up sucking. For now I'm cautiously optimistic.

[B|ackPanther]

I'm happy for Marvel.

[King of Town]

For all the people that have at one time or another said that JQ at marvel has got to go, the numbers (on the comic front at least) speak for themselves.

For all of the people that have said that they are tired of huge, multi-part crossover events, the cold hard reality is that you vote with your dollars. Complain about it all you want, but the reality of it is, the majority of people keep buying them. Marvel keeps making money on them.

Now, I don't mean to say that people will always keep buying. If something is crappy, I think people are smart enough not to buy it. However, Marvel just keeps putting out a consistantly good product (for the most part), so people keep buying.

For those of you hoping/demanding that Marvel lower prices, keep dreaming. It is laughable to think that they would lower prices. You might argue that by lowering prices, you could bring in more readers. That might be true, but do you really think Marvel would risk current sales numbers by lowering the price on the chance that it would bring in more readers, and thus hope to bring in more money? NO WAY. Look at the numbers; they are doing just fine without you.

Please don't take this as a dig on Marvel. I read and enjoy tons of their stuff (yes, WWH included). It is just simple economics people. I don't own any Marvel stock, but with a 25%ish price jump, I sure as heck wish I did!

Congrats Marvel! Keep up the good work!

-KOT