Marvel Entertainment 3Q Profit Down 60% On Lower Film Revenue
DOW JONES NEWSWIRES
Marvel Entertainment Inc. (MVL), which is being bought by Walt Disney Co. (
DIS), reported third-quarter earnings slumped 60% on lower film revenue, as well
as lower licensing sales related to last year's "Iron Man" and "Incredible Hulk"
films.
On Aug. 31, Disney, the largest U.S. media company by market value, said it
agreed to pay $4 billion for Marvel, the creator of comic-book characters
Spider-Man, the X-Men and thousands of others.
Marvel last month said it wouldn't provide a financial outlook for 2009 or
next year given the proposed acquisition. In August, the company had raised its
2009 earnings and sales forecast, citing a stronger-than-expected performance in
the first half.
The company Tuesday posted a profit of $20.4 million, or 26 cents a share,
down from $50.6 million, or 64 cents a share, a year earlier. Net sales tumbled
42% to $105.7 million, on a lower level of film activity and related licensing.
Analysts polled by Thomson Reuters expected, on average, earnings of 24 cents
on revenue of $93 million.
Marvel's licensing business--an increasing area of focus for the company--saw
sales decline 16%. The company's publishing segment's sales were down 5.8%,
while film production sales slumped 73%. Operating profit was down for licensing
and publishing, while film production swung to a loss.
Chairman Morton Handel said the results were strong, despite the absence of
any Marvel Studios feature film release in 2009. He added the company was
focusing on licensing opportunities tied to next year's release of "Iron Man 2,"
as well as development on the company's "Thor," "Captain America" and "the
Avengers" projects.
About 7% of Marvel's $676 million of revenue last year came from toys, down
from more than 70% in 2000, The Wall Street Journal reported. The company's
business model has shifted rapidly in recent years. Last year was the first year
the company financed its own movies, which brought in $255 million during 2009
alone--more than the company's entire revenue in 2000. Licensing has grown for
Marvel, from 8% of revenue in 2000 to 43% last year.
Shares of Marvel closed Monday at $50.01 and were inactive in premarket
trading.
-By John Kell and Jenny Park, Dow Jones Newswires; 212-416-2480; john.kell@
dowjones.com
(END) Dow Jones Newswires
11-03-090748ET
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