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NEW YORK — Shares of Marvel Entertainment fell close to a low it set exactly a year ago after the superhero powerhouse reported higher second-quarter financials that fell below Wall Street expectations and said it has lowered its second-half toy revenue forecast.
Management cited possible lower reorders from toy partner Hasbro Inc. as a reason, but reiterated its overall full-year 2007 earnings projections.
Marvel shares closed down 5.1% at $22.73 after setting an intraday low of $21.72. On Aug. 7, 2006, the stock hit a low of $18.30.
Marvel chairman Morton Handel also said Tuesday that the company has completed principal photography on its first self-produced picture “Iron Man” and on July 9 started it for second film “The Incredible Hulk.” Both movies are slated for summer 2008.
Marvel posted a second-quarter profit of $29.1 million, up 78.5% from the year-ago period. Revenue rose about 20% to $101.5 million. However, both figures for the latest period fell short of Wall Street estimates.
Licensing revenue has continued to benefit from “Spider-Man 3” merchandise, while Marvel’s publishing segment has seen “strong sales” for its Civil War series, the company said.
In 2008, Marvel will release its first two self-produced films, which will bring the company the direct benefit from each film’s profit in addition to the related fees from merchandising.
The firm also said it is moving along with licensing-based feature films, such as 20th Centur Fox’s “Wolverine” and Lionsgate’s “The Punisher 2.”
It is also continuing to develop animated TV projects, such as “Spider-Man” by Sony for the Kids’ WB, as well as direct-to-DVD product for Lionsgate, including next week’s “Doctor Strange” and “Teen Avengers” and “Hulk Smash,” both slated for next year.
Marvel also said “Spider-Man the Musical” remains in development, with an opening date yet to be determined.
Second-quarter licensing revenue grew 45% to $49.3 million. Marvel’s “Spider-Man” merchandising joint venture with Sony Corp. brought in revenue of $18.2 million, while revenue from Marvel Studios decreased by $3.4 million due to large year-ago film fees.
Toy unit revenue of $19.3 million in the latest period meant a decline from last year’s $25.4 million. The company cited “the transition from toys produced by Marvel in 2006 to toys principally produced by Hasbro.”
Marvel on Tuesday reported film production operating costs of $300,000 for the second quarter due to its self-produced feature films. These costs were partially offset by a $1 million increase in the fair value of an interest rate cap associated with the company’s film finance facility and a $700,000 increase in the fair value of forward contracts for the Canadian dollar connected to future spending on “Hulk.”
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