Marvel Entertainment has reported a significant increase in its net income for its fourth quarter and full year ending December 31st 2007, with the rise largely attributable to the strength of its worldwide licensing operations.
Net income for the fourth quarter rose to $27.6 million, compared to $11.7 million in Q4 2006. As well as the success of the licensing division, the gains were also in part thanks to higher operating margins in toys.
For the full year 2007, Marvel reported net income of $139.8 million, up from $58.7 million in fiscal 2006.
Licensing segment net sales increased by 129 per cent in Q4 to $58.5 million, primarily due to the continued strength from Marvel's Spider-man merchandising joint venture with Sony, as well as from royalty receipts related to the box office and home video/DVD performance of Spider-man 3.
Marvel's toy segment saw net sales decrease to $20.5 million in Q4, compared with $31.1 million in Q4 2006. This was due to the transition from toys produced and sold by Marvel in 2006 to toys licensed to and produced and sold by Hasbro, the firm's master toy licensee, in 2007.
Margins improved sharply in the toy segment to 73 per cent from 21 per cent.
"Marvel's Q4 and full year 2007 operating results reflected strong global demand for consumer products and entertainment based on our characters," said chairman Morton Handel. "We look forward to building on our success with the launch of our self-produced feature film slate and the debut of our first two feature films - Iron Man and The Incredible Hulk - this summer.
"Consumer excitement surrounding these projects is already significant and growing. Our approach to feature film production is an important new business opportunity for our company. The film slate will provide global exposure for our characters and the Marvel brand and drive growth across our businesses."
Looking forward, and Marvel's licensing segment is expected to contribute net sales of approximately $190m-$215m in 2008 and to generate an operating margin of 65-68 per cent.