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Marvel Enterprises has monster quarter

Heroic revs fuel earnings leap to $90 million

NEW YORK — Marvel Enterprises reported second-quarter profits of superhero proportions Tuesday, as the comicbook shop’s X-Men, Hulk and Spider-Man licenses helped quadruple net income to $32.8 million from $8.4 million in second-quarter 2002.

The earnings leap came on total revenues up 27% to $90 million, way ahead of estimates by analysts, who feared the uninspiring box office perf of Universal’s “The Hulk” would dampen results. In fact, licensing fees from character rights agreements to movies and merchandisers nearly tripled, from $17.2 million last year to $56.8 million, mainly because the company had more films in release during the period.

Toy sales, however, drooped by more than half, to $13.7 million, compared to $35.8 million in the year-ago quarter. Sales from Marvel’s publishing operations rose to $19.5 million from $17.9 million.

But the bonanza may not have enough steam to last into the third quarter, as the company warned Q3 sales may be down as much as 30% year-on-year, due to seasonally low comicbook sales.

Marvel also warned that its publishing sales likely won’t get a big promotional kick out of “The Hulk.”

‘Fantastic’ ’04?

Company said it will have four major releases based on Marvel characters in 2004: July’s “Spider-Man 2,” “Blade 3,” “The Punisher,” and “The Fantastic Four,” which may be ready by December 2004, though the script is not yet complete.

Marvel prexy-CEO Allen Lipson was cautious about the prospects of repeating the first “Spider-Man” pic’s $850 million box office gross, but noted sequels to “Blade” and “X-Men” did better than the originals. “You could argue that ‘Spider-Man 2’ will do better … and we hope that will occur.”

Lipson also talked up the company’s prospects in TV spinoffs of its core characters.

“We haven’t even begun to scratch the surface on developing the broad range of opportunities to repackage or repurpose our characters to target specific demos and market niches,” Lipson said during an analysts conference call Tuesday. He noted huge early reception to the “Spider-Man” animation project on MTV and said the company was exploring additional TV spinoffs such as “Blade” and several live-action projects. The Gotham-based group has a proprietary library of more than 4,700 characters.

Exceeding forecasts

Company projected it will generate significantly higher sales (at $287 million-$293 million for the full year) than originally forecast, due in part to “The Lord of the Rings” toy sales preceding the third film’s Q4 release. Company expects 2004 revenues to be $315 million-$345 million.

Lipson flatly denied any current deal to acquire indie producer/distrib Artisan. “At present, we are not looking to do any major acquisitions, period,” he said.

Stock closed up $2.85, or 15%, at $21.50 Tuesday.