MARVEL REPORTS Q4 2007 NUMBERS: PROFIT MORE THAN DOUBLES

[MattBrady]

NEW YORK (Associated Press) - Marvel Entertainment Inc., which licenses comic book characters for films and consumer products, said Tuesday fourth-quarter earnings more than doubled on higher licensing revenue and toy profit.

Marvel, whose characters include Spider-Man, The Incredible Hulk and Captain America, said net income rose to $27.6 million, or 35 cents per share, from $11.7 million, or 14 cents per share, in the year-ago period.

The result exceeded expectations on Wall Street, where analysts projected profit at 29 cents per share.

Sales rose 28 percent to $109.3 million from $85.2 million last year. Demand for Spider-Man pushed up merchandise licensing sales more than twofold to $58.5 million, offsetting a decline in toy sales.

The decrease in toy sales came as Marvel switched toy production to a licensed manufacturer. The move led to higher segment profits despite the lower sales total.

For the year, profit jumped to $139.8 million, or $1.70 per share, from $58.7 million, or 67 cents per share. Sales rose 38 percent to $485.8 million.

Marvel said that it still expects profit of $1.30 to $1.50 per share on sales of $360 million to $400 million in 2008.

Analysts expect profit of $1.43 per share, according to Thomson Financial.

Marvel's estimates do not include costs or revenue from box office, DVD or TV performance of its two self-produced feature films, "Iron Man" and "The Incredible Hulk." The company previously licensed its characters for films - Spider-Man was done through the Sony studios - but set up its own studio last year.

Marvel shares fell 76 cents, or 2.7 percent, to $27 in premarket trading. They closed at $27.76 on Friday.

From Marvel’s report

Marvel's Chairman, Morton Handel, commented, "Marvel's Q4 and full year 2007 operating results reflected strong global demand for consumer products and entertainment based on our characters. We look forward to building on our success with the launch of our self-produced feature film slate and the debut of our first two feature films - Iron Man and The Incredible Hulk - this summer. Consumer excitement surrounding these projects is already significant and growing. Our approach to feature film production is an important new business opportunity for our company. The film slate will provide global exposure for our characters and the Marvel brand and drive growth across our businesses."

Fourth Quarter Segment Review:

Licensing Segment net sales increased approximately 129% in Q4 2007 to $58.5 million compared to Q4 2006, primarily due to continued strength from Marvel's Spider-Man merchandising joint venture (JV) with Sony as well as from royalty receipts related to the box office and home video/DVD performance of the Spider-Man 3 theatrical release. Operating margins in the Licensing segment were 57% in Q4 2007, slightly below operating margins of 60% in Q4 2006. Licensing segment operating income in Q4 2007 reflected a charge of $11.5 million associated with talent participations under the JV merchandising program related to Q4 2007 and prior periods.

Marvel's Publishing Segment net sales increased $1.7 million or 6% to $30.3 million in Q4 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 also rose 6% on a year-over-year basis to $12.3 million in Q4 2007 with a comparable operating margin of approximately 41%.

Marvel's Toy Segment net sales decreased to $20.5 million in Q4 2007 compared to $31.1 million in Q4 2006. The decrease was due to the transition from toys produced and sold by Marvel in 2006 to toys licensed to and produced and sold by Hasbro, Marvel's master toy licensee, in 2007. Margins improved sharply in the Toy Segment in Q4 2007 to 73% from 21%, reflecting the significantly greater proportion of higher-margin license income recorded in 2007 as a result of that transition. Q4 2006 revenues were largely comprised of wholesale sales, subject to a corresponding cost-of-revenues expense. Toy Segment operating income more than doubled in Q4 2007 compared to Q4 2006, reflecting the benefit of higher margin license income from sales of toys related to the Spider-Man 3 feature film.

Marvel's Film Production segment operating losses increased to $3.1 million for Q4 2007, compared to $2.2 million in Q4 2006, reflecting the expanded staffing of our studio operation. Film Production Segment operating costs consist primarily of employee compensation and the expenses associated with a portion of the Marvel Studios office in California.

Along with listing the upcoming Iron Man and Incredible Hulk movies (hitting theaters on May 2nd and June 13th, respectively), Marvel reiterated that writers have been engaged for Captain America, Thor and The Avengers films, while Ant-Man has both writer and director. Punisher War Zone is slated for a September 12th release, while X-Men Origins: Wolverine is slated for a May 1, 2009 release.

Wolverine and the X-Men, an animated television series, is slated for a spring, 2009 release, with Hulk: The Animated Series and a property called Super Hero Squad. Iron Man: The Animated Series is slated for a spring 2008 release.

Upcoming direct-to-DVD releases include:

Next Avengers: Heroes of Tomorrow - August 2008
Hulk Vs. - January 2009
Thor: Son of Asgard - September 2009
Planet Hulk - February 2010

And Spider-Man: The Musical? Still in development.

[ejulp]

Publishing grew 6 percent...woooooot.

Planet Hulk would be mint in 2010...but what I really want is a Marvel Civil War, I think its a no brainer with the mainstream press it received...kind of a super hero tale most mainstream ppl aren't used to thinking about in relation to comics. I think an animated movie of it would create additional buzz for Marvel...maybe after they establish some more characters in film, they'll release this.

Also, is Hulk Vs. a series of dvds, or World War Hulk (though that'd make no sense if it came out before Planet Hulk, unless they reverse things)?

[Predabot1]

SON OF ASGARD!!

Planet Hulk!

Let's just hope that these animated films keep a high quality, and that the original creators can be involved as much as possible.

[paptschik]

I hate that we won't get the X-Men toon till Wolverine hits theaters. I'm surprised by Hulk and that Super Hero Squad.
Iron Man cartoon coming this spring: Nice!
Writer and director for Ant-Man: Also nice.

But the best news are the direct to DVD cartoons, I love those...to bad we only get one this year...and I'm soooo looking forward to Planet Hulk.

[samnoir]

Given the avalanche of merchandise that we've seen the past few years, it would be interesting to see how Marvel stacks up against a company like Disney!

___________________________________

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[HieuLeBui]

"Planet Hulk - February 2010" ? I am there !

I wonder if Silver Surfer will be in it though.

[Question86]

Is Edgar Wright still the director for Ant-Man?

I love anything that man does. Simon Pegg for Hank Pym Im calling it now..

[brett123]

I've never bought a Marvel animated film, but I'd consider buying 'Planet Hulk', provided that it's not a suck-fest. Animation is the way to go with this one, I think. A live action production would require a Star Wars-type budget, and that'd never happen.

If they remain faithful to the source material, then they could also follow it up with a 'World War Hulk' film as well.

[B|ackPanther]

Wow, this is good news. I can't wait for Planet Hulk and Son of Asgard.

[paptschik]

Originally Posted by brett123

I've never bought a Marvel animated film, but I'd consider buying 'Planet Hulk', provided that it's not a suck-fest. Animation is the way to go with this one, I think. A live action production would require a Star Wars-type budget, and that'd never happen.

If they remain faithful to the source material, then they could also follow it up with a 'World War Hulk' film as well.

Why wouldn't a Star Wars-type budget happen? I mean, production alone for the Star Wars movies, afaik, wasn't that much over 100 million, for a bigger comic movie that should be the minimum, they just should know how to spend the money.

[WildcardZ]

Congrats to Marvel. Really looking forward to some of those projects.

[Prozac Man]

Originally Posted by paptschik

Why wouldn't a Star Wars-type budget happen? I mean, production alone for the Star Wars movies, afaik, wasn't that much over 100 million, for a bigger comic movie that should be the minimum, they just should know how to spend the money.

The reason the Star Wars movies were able to be made for 100 million is because George Lucas owns the effects companies that worked on them. Same movies made by another studio that has to outsource their effects would cost 200 million or more.

[nemler]

Originally Posted by Prozac Man

The reason the Star Wars movies were able to be made for 100 million is because George Lucas owns the effects companies that worked on them. Same movies made by another studio that has to outsource their effects would cost 200 million or more.

Really? It would cost double? Seems like a wild guess on your part. How could you possibly know that owning an effects company would save you 50% on your costs?

I think DC has far superior animated output, but recently Marvel has improved. So far I like the four direct to dvd releases they have.
Their tv shows still need work, though.
On the flip side, I really enjoy Marvel comics way more than DC's.

[wespierce1]

I just love how they gain so much in so many other fields while profits in comics and actual publishing dollars continue to decrease. I can't speak for all, but If I were an investor I might be a bit peeved that, even though there is a marked increase in profits on the alternative media, the comics for which this material is based are becoming more and more lackluster and losing profit, potentially damaging the future of the alternative media outlets they are so enjoying the profits on currently.

[paptschik]

Originally Posted by Prozac Man

The reason the Star Wars movies were able to be made for 100 million is because George Lucas owns the effects companies that worked on them. Same movies made by another studio that has to outsource their effects would cost 200 million or more.

And what about movies like The Fifth Element (around 90 million I think?)? Or heck, the Lord of the Rings movies were overall pretty affordable as well, weren't they? (like...300-400 million for the whole trilogy? I'm not sure about that one, it's pretty much a guess from my side)

Or lets take something more recent....Transformers was about what? 150 million? Or the first PotC movie, 150 again? That's barely above what the original Hulk got and it's about the same budget I'd expect from Iron Man as well as the new Hulk. My point is....if the money is used correctly and not thrown out the window (does anyone know what the cash was wasted on in Superman Returns and Spider-man 3?) a Planet Hulk movie should in theory be possible AND would look amazing with just the budget you'd expect from a Hulk movie.

[Gladiator X]

Man! I sure hope the plan for Cap,Thor and Avengers movies goes through. Those coupled with IM and Hulk could very well be the greatest cinema saga EVER, if done right!


Son of Asgard sounds cool. I wonder if it will be an adaption of the book or a new story based on that version of Thor?


Good time to be a Avengers/Marvel fan, if ya ask me.

[CaptainCanad]

Originally Posted by wespierce1

I just love how they gain so much in so many other fields while profits in comics and actual publishing dollars continue to decrease.

Um, they seem to be doing okay there as I read it; it says that profits in Publishing went up.

[jonny quest]

Originally Posted by brett123

I've never bought a Marvel animated film, but I'd consider buying 'Planet Hulk', provided that it's not a suck-fest. Animation is the way to go with this one, I think. A live action production would require a Star Wars-type budget, and that'd never happen.

If they remain faithful to the source material, then they could also follow it up with a 'World War Hulk' film as well.

It could never be as bad as the Hulk movie.

[funjoe]

Originally Posted by Question86

Is Edgar Wright still the director for Ant-Man?

I love anything that man does. Simon Pegg for Hank Pym Im calling it now..

According to this week's LITG, Edgar Wright is still attached, and recently stated the script is finished. He indicated either Ant-Man or Scott Pilgrim would be his next film.

[leeisl]

Originally Posted by wespierce1

I just love how they gain so much in so many other fields while profits in comics and actual publishing dollars continue to decrease. I can't speak for all, but If I were an investor I might be a bit peeved that, even though there is a marked increase in profits on the alternative media, the comics for which this material is based are becoming more and more lackluster and losing profit, potentially damaging the future of the alternative media outlets they are so enjoying the profits on currently.

Mind elaborating a little?

[Spidey616]

Planet Hulk!?!?!/!???!!?!???!?!??!

I only hope it'll be as good as Greg Pak's awesome storyline and true to the source material. Hey, if it's successful enough, we may get an animated version of......

WORLD WAR HULK!!!!!!!!!!!!!!!!!!!!!

[Ozmodiar]

Originally Posted by wespierce1

I just love how they gain so much in so many other fields while profits in comics and actual publishing dollars continue to decrease. I can't speak for all, but If I were an investor I might be a bit peeved that, even though there is a marked increase in profits on the alternative media, the comics for which this material is based are becoming more and more lackluster and losing profit, potentially damaging the future of the alternative media outlets they are so enjoying the profits on currently.

Yeah, I bet investors are really pissed right now.

[nemler]

Originally Posted by Ozmodiar

Yeah, I bet investors are really pissed right now.

Did anyone here buy Marvel stock back when it was under $5 a share?

I didn't.
I nearly scooped up a bunch when it was just over $12 a few years ago, but I didn't do that either. Kicking myself now! Plus, I bet it will climb further once the new Marvel funded movies start doing well.

[VaderTime]

Originally Posted by wespierce1

I just love how they gain so much in so many other fields while profits in comics and actual publishing dollars continue to decrease. I can't speak for all, but If I were an investor I might be a bit peeved that, even though there is a marked increase in profits on the alternative media, the comics for which this material is based are becoming more and more lackluster and losing profit, potentially damaging the future of the alternative media outlets they are so enjoying the profits on currently.

Did you even read the article?!?!

Marvel's Publishing Segment net sales increased $1.7 million or 6% to $30.3 million in Q4 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 also rose 6% on a year-over-year basis to $12.3 million in Q4 2007 with a comparable operating margin of approximately 41%.

[Uncle Jawa]

Iron Man is set for Spring 2008? Is that right? I mean, I've only seen one little pic of it. I would expect to have seen more promos for it by now.

I like the sounds of some of the other animated projects. A SUPER HERO SQUAD show? Obviously that's based on the little figures with the big hands and feet. I think that could be fun. I hope THOR: SON OF ASGARD at least resembles the comic book series of a few years ago. As a long-time Thor fan, I really enjoyed it. The DOCTOR STRANGE DVD had a little preview of the NEXT AVENGERS project. I liked the sounds of it. And I have to second the earlier complaints about not seeing WOLVERINE AND THE X-MEN until next year. I've really been looking forward to it.