'Iron Man' lifts Marvel Entertainment 3Q profit

Strong box office revenue for film 'Iron Man' helped boost Marvel Entertainment Inc.'s third-quarter earnings by 39 percent, and the licensing and comic-book publishing company on Tuesday also raised its 2008 forecast.

But 2009 will prove a different picture.

Marvel expects only "modest" performance next year, partly due to 'Iron Man' revenue shifting to 2008 and no 2009 summer feature films slated for release. It also cited less expected Spider-Man-related revenue and the slowing economy's effect on the retailers who sell its character-driven merchandise.

In morning trading, shares fell $1.66, or 5.4 percent, to $29.22.

For the three months ended Sept. 30, New York-based Marvel earned $50.6 million, or 64 cents per share, compared with $36.3 million, or 45 cents per share, a year ago. Revenue grew 48 percent to $182.5 million, including about $60 million in earlier-than-expected "Iron Man" revenue, from $123.6 million last year.

The results easily beat the average estimates of analysts polled by Thomson Reuters, who had forecast profit of 45 cents per share on revenue of $146.1 million.

Paramount's "Iron Man", starring Robert Downey Jr. as the title comic-book character, grossed $318.3 million in the U.S., according to Media By Numbers LLC in Encino, Calif. It is the among the 25 top-grossing films of all time. Paramount Pictures is owned by Sumner Redstone's media conglomerate Viacom Inc.

Film production sales totaled $90.2 million in the third quarter, versus none in the prior year. Marvel credited the box office take of "Iron Man," fees for serving as a producer for the film and for "The Incredible Hulk," as well as foreign DVD pre-sales for 'Iron Man,' which was released on DVD on Sept. 30.

In the quarter, licensing fees fell 29 percent to $58.1 million in part due to weakness in Spider-Man film merchandising joint venture. The last Spider-Man film was released in May 2007. Publishing sales slipped 3 percent to $34 million, as lower trade paperback sales and custom publishing weren't totally offset by higher sales of traditional comics.

Based on the stronger-than-expected quarterly results, Marvel raised its 2008 outlook to between $2.45 to $2.65 per share on revenue of $640 million to $670 million, from prior estimates of $1.55 to $1.75 per share on revenue of $450 million to $480 million. The new guidance is well above analysts' average forecast for profit of $1.93 per share and revenue of $527.9 million.

But for 2009, Marvel forecast earnings per share of $1 to $1.35 on revenue of $415 million to $460 million. Analysts had projected earnings of $1.94 per share on revenue of $617.8 million.

"While Marvel's core licensing business continues to grow, global visibility and consumer demand created by tent-pole feature films based on our characters, as well as the timing of related revenues, creates variability in our year over year operating income," Chairman Morton Handel said in a statement.

Marvel's next feature films, 'Iron Man 2' and 'Thor' are slated for release in summer 2010, with 'The First Avenger: Captain America' and 'The Avengers' to be released the following year.