Citing improvements in licensing revenue Marvel Enterprises raised its quarterly earnings targets for the third quarter from the original estimate of 25 to 30 cents per share to 37 to 41 cents a share.  The market reacted to Marvel's announcement by pushing Marvel's stock up by as much as 15%. 

Interestingly enough, estimated sales for Q3 will roughly equal what they were during the same period last year, but net income is estimated at five times higher than in Q3 2002 ($32 million vs. 6.7 million).  The reason for the huge increase in profits is the tremendous growth in licensing income, which according to one estimate will account for a whopping 56% of Marvel's revenue in 2003.  The best thing about licensing revenue is that in most cases the costs associated with it are negligible; it goes right to the bottom line.

With comic-based films remaining a hot commodity in Hollywood, Marvel has been able to better its deals with each new Marvel-based film -- and even when the films, such as Ang Lee's Hulk, under-perform at the box office, they still create tons of licensing revenue through sales of toys, apparel, and video games.  Case in point, Marvel reported that 'License revenues in excess of minimum guarantees, or 'overages,' were over 14 million for the quarter.' So not only is Marvel continuing to license new properties and new product categories, it is also gaining substantial revenue from the continuing sales of previously licensed products, which are surpassing guarantees and generating more income for Marvel.