For Q3 2008, Marvel reported net sales of $182.5 million and net income of $50.6 million, or $0.64 per diluted share, compared to net sales of $123.6 million and net income of $36.3 million, or $0.45 per diluted share, in Q3 2007. The year-over-year improvement reflects an earlier-than-expected recognition of approximately $60 million in film revenues associated with the box office performance of Marvel's IRON MAN feature film.
However, with the lack of a new film scheduled for 2009, Marvel Chairman Morton Handel expects next year to be more modest.
"The 2009 decline reflects an expected substantial reduction in SPIDER-MAN L.P. revenue, the absence of any new Marvel Studios feature film releases during the year and a related decrease in licensing activity, as well as the expectation that the economic environment may affect the performance of retailers and licensees. Additionally, the increase announced today in our financial guidance for 2008 as a result of earlier-than-expected revenue from IRON MAN box office and DVD sales causes an offset in our expected 2009 revenue. Looking ahead to 2010 and 2011, we expect to return to releasing two tent-pole summer movies per year with their related licensing and marketing programs to drive our company-wide performance."
Handel also said, "In addition to achieving continued strength in our operating results during the third quarter, we made fundamental changes in our film facility and our film distribution agreement which enable us to improve the distribution terms of our coming Marvel film slate releases. The enhancements to our film slate structure reflect our long-term confidence in our self-produced feature films, while also maintaining discipline in limiting financial risk."
As anticipated, Licensing Segment net sales declined to $58.1 million in Q3 2008 compared to $82.2 million in Q3 2007. The decline in SPIDER-MAN L.P. revenues reflects the time that has passed since the May 2007 release of SPIDER-MAN 3. Q3 2008 benefited from licensing activity related to the IRON MAN and THE INCREDIBLE HULK feature film franchises.
IRON MAN 2 is set for a May 7, 2010 release, THOR for July 16, 2010, THE FIRST AVENGER: CAPTAIN AMERICA is set for May 6, 2011 and THE AVENGERS will come out July 15, 2011.
In licensed films, Lionsgate's PUNISHER: WAR ZONE is set for a December 5, 2008 release and X-MEN ORIGINS: WOLVERINE (Fox) will come May 1, 2009.