Marvel (NYSE: MVL), whose competitors include media companies such as Disney (NYSE: DIS) and Time Warner (NYSE: TWX), reported Q3 numbers on Tuesday. Revenues increased a whopping 48% to $182.5 million. Earnings per diluted share soared 42% to $0.64. And net cash from operations was more powerful than a locomotive (wait, I might be mixing universes with that metaphor): they went up more than ten times, coming in at $172.2 million.
All of that is impressive. It shows that Marvel's movie model can bring in the money. Projects such as Iron Man, distributed by Viacom (NYSE: VIA), and The Incredible Hulk, distributed by General Electric's (NYSE: GE) Universal, helped to drive the quarter.
However, as this article points out, Marvel isn't expecting much from 2009. Why's that? Because there are no new self-produced movies scheduled for release in that calendar year. That's going to drive long-term shareholders crazy, since I'd have to assume the stock won't be doing much during that time period. Traders might get some opportunities if the stock becomes volatile, but either way, there really are no big catalysts on the horizon.
All is not lost, though. For one thing, Marvel should use 2009 to really push its publishing business. The company's heart is indeed its portfolio of comic books. Sales and operating income for the nine-month period have declined, so there is an opportunity there. And remember that X-Men Origins: Wolverine is due to be released by News Corp. (NYSE: NWS) next summer. Of course, that isn't the greatest catalyst since it isn't self-produced, it's licensed. If it's licensed, then Marvel does not reap as much money. It's just the way it goes.
If you've owned Marvel for a long time (like I have), and if you've got some relatively significant paper profits in it (like I have), then you may want to consider taking some money off the table. I'll be honest, I haven't pulled the trigger on any of my Marvel shares this year. I know I should, but I guess I'm a bit emotionally attached to the stock. It happens. Not only that, but since I've seen the shares hold up reasonably well during the economic crisis, I figure that it might be okay to leave the value there and not screw up by reinvesting elsewhere. Of course, that's probably just emotion talking again since cash isn't a bad place to be either. I'll evaluate my Marvel position over the coming days and see what needs to be done.
Disclosure: I own Disney, GE, Marvel; positions can change at any time.
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Reader Comments (Page 1 of 1)
11-04-2008 @ 4:53PM
Jeff said...
Marvel is hot!! What a quarter!! It will continue to grow through 2009 with mutiple revenue streams in marketing, a possible Ironman 3-D movie, the development of more properties and alliances with top stars and directors. Exciting stuff!!