Marvel Enterprises continues its fiscal winning streak, on Thursday upping its forecast for third-quarter earnings based on higher-than-expected fees from motion picture studios and merchandise licenses.
Company shares leaped more than 17.75% to close at $28.52, an all-time high for the comicbook company. The bulls backed Marvel despite the fact that the company is typically very conservative in its budgeting and earnings projections, and the upward revision was not wholly unexpected.
Company said preliminary indications are revenues will clock in at $84 million-$87 million, compared with its earlier estimate of $60 million-$65 million for the quarter. Company also guided toward net income of $29 million-$32 million, up from its earlier expectation of $19 million-$24 million.
Analysts now broadly expect the comicbook licenser and producer to generate total sales for the year of about $310 million. The uptick in third-quarter sales is thought to come primarily from “Hulk” merchandise, pay TV-related fees for “Spider-Man,” a portion of the upfront payment for “Spider-Man II” and film licenses from February release “Daredevil.” Forthcoming releases include Artisan’s “The Punisher” in April as well as Columbia’s “Spider-Man II” in July and Fox-produced “The Fantastic Four” in early 2005.
Company said performance in the three months ended Sept. 30 reflects “building momentum in Marvel’s licensing division, principally consumer products, supported by the growing entertainment exposure of the Marvel universe of characters.”
License categories such as apparel, toys and household goods have exceeded company’s internal projections, Marvel said, while overages (licensing revenues in excess of its minimum guarantees) from its studio production/distribution partners surpassed $14 million in the quarter.
Marvel also said it beefed up its balance sheet over the summer, with $203 million in cash on the books as of Sept. 30 compared with $144.3 million in June. Long-term debt stands at $151 million.
Company will report third-quarter financial results Nov. 4.
Gotham-based Marvel has a library of more than 4,700 characters. The bulk of its sales have derived from film, publishing and toy licenses to those character rights, though the company intends to start producing its own feature films and direct-to-video product.
Last month, Marvel settled a dispute with onetime Marvel Comics creator Joe Simon in order to gain control of the Captain America copyrights. Marvel said it intends to build up the franchise through media including feature films, publishing, TV deals and the usual mix of merchandise licensing. According to Marvel, Captain America ranks as one of the company’s top 10 most recognizable characters.