Marvel Entertainment Inc. 3Q Profits Decline By 60%
Marvel Entertainment Inc. was acquired by Walt Disney Co. on August 31, 2009 and the announcement was a positive one because it generated the idea that financially, the future seemed bright. The sale of the company didn't concluded as yet, but will by the end of the year.
One of the most prestige establishments for comic book/media faced a tough third quarter financially...how could this be?
According to many financial outlets, namely The Wall Street Journal, due to a lack of blockbuster hits and lower licensing sales in the most recent quarters, the company as a whole suffered a 60% decline in the third quarter earnings.
The profit posted on Tuesday shows the company $20.4 million or in other words, if checking their symbol on the Dow Jones Industrial, they're down 26 cents a share. A year ago, the entertainment giant who has 12 divisions in many countries around the world, had a profit of %50.6 million or 64 cents a share.
Due to the slump in both their film division and licensing areas, net sales dived 42% to $105.7 million. This comes as shock because the licensing has been their area of expansion, yet it saw sales decline by 16%. Film production for Marvel was down a whopping 73% and publishing also suffered because that section declined 5.8%.
The most recent Marvel Studios theatrical releases were "Punisher: Warzone" and "X-Men Origins: Wolverine," "Iron Man" and "the Incredible Hulk." On a budget of $35 million, Warzone earned a little over $8 million domestically, whereas it pulled in a much lower figure overseas with $2 million at the box office. As for X-Men: Origins, the production budget was $150 million, with a domestic take of $179 million. The foreign numbers for the film stand at $193 million. The Hulk sequel brought in $134 million domestically on a budget of $150 million. Their foreign take was $128 million. "Iron Man" earned $318 million domestically on a budget of $140 million, along with $266 million overseas.
Chairman Morton Handel made it clear that a lack of films by Marvel Studios in 2009 created the decline but all attentions in their licensing division will be geared towards "Iron Man 2" being released May 7, 2010. The company is also looking ahead to their future projects including "Thor," "Captain America" and "The Avengers."
Toys play a vital role nonetheless in Marvel Entertainment, although last year their percentage stood at seven on the $676 million revenue generated. In 2000, the percentage used to be 70%. More changes have taken place with the company because the company has started financing their own films, which brought in $255 million. That's a great feat for the company because that total alone exceeds the entire revenue of the company in 2000.
Shares of Marvel Entertainment Inc (MVL) closed on Monday at $50.01
Whispers68: Finance is an area that truly interests me so this matter is something I'll follow. What does this financial trouble mean for shares in the coming days? What does this mean for the rest of the year since no films are being released until May 7, 2010? The company needs their goldmine to return..."Spider-Man" because each film had a budget of around $140+ million and yet made at least four times the total back internationally.
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