Marvel's licensing sales, driven by Spider-Man 3, more than doubled to $98.9 million for the quarter ending March 31st versus $39.6 million during the same three month period in 2006. Meanwhile publishing sales were up from $23.9 million in 2006 to $27.5 million in Q1 2007 thanks to strong sales for Civil War and the successful debut of the
Overall Marvel's total net sales for the quarter were $151.4 million versus $90.1 million in 2006, while operating income more than tripled from $32 million last year's first quarter to $101.1 million in Q1 2007 with net income rising to 56 cents per share versus 19 cents during the same period last year. Marvel continues to expect 2007 profits to fall in the range of $1.30 to $1.55 per share based on sales of between $375-$435 million for the full year. Marvel currently has $40.8 million of cash and investments on hand and repurchased 829,000 shares of stock as part of a stock re-purchase program announced last June.
Publishing net profits were up not only because of increased sales, but also because of an increase in margin from 37 to 42 %, the highest margin the publishing segment has been able to achieve since 2004.
Spider-Man 3 provided the bulk of Marvel's licensing revenues, bringing in $56.9 million (both domestically and internationally) of the $98.9 million total for Marvel's licensing segment. Another $70 million payment from Hasbro that was triggered by the release of Spider-Man 3 has been received and will be recognized in future periods.
Despite the strong quarterly report Marvel's stock price declined slightly --though it has recovered some of the loss in after-hours trading. Marvel expects 2007 to be front-loaded with the majority of its earnings in the first half of the year. Because of its 'on shelf' policy Marvel recognized the majority of the revenue from its joint venture Spider-Man 3 licensing program during the first quarter as the items from its licensees hit the shelves at retail. During the conference call with investment analysts a Marvel spokesman declared that even with some anticipated 'overages,' licensing revenues from the Spider-Man 3 joint venture with Sony from the remaining three quarters of 2007 would cumulatively not equal the $58 million from Q1.