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Earnings Analysis: 
Marvel Net More than Doubles
Author: George Shopov
123jump.com



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Marvel Enterprises Inc. reported Monday quarterly profits that more than doubled from last year, boosted by contributions from its joint venture with Sony for Spider-Man movie merchandising and higher international licensing revenues.

 
Marvel Enterprises, Inc. (MVL: chart) announced before the bell Monday that its quarterly income more than doubled from a year ago, driven by solid revenue growth. The New York-based entertainment and licensing company reported net income of $30.1 million, or 27 cents per share, for its fiscal 2004 fourth quarter, in contrast to net income of $13.5 million, or 12 cents per share, last year. Marvel said its latest earnings included an income tax credit of 6 cents a share. The average analysts’ estimate was for a profit of 16 cents per share. For the quarter ended December 31, sales advanced 17% to $100.5 million from $85.7 million, for the 2003 equivalent. Analysts had expected sales of $86.8 million. Marvel, which is one of the world's leading comic book publishers, said net sales in its licensing segment swelled 89% to $56.7 million, accounting for more than half of total sales. The company cited contributions from its joint venture with Sony Corp. for Spider-Man movie merchandising and strong international licensing revenue as main factors for the improvement. Net sales in the publishing segment climbed 16% to $22.1 million, while the toy segment saw sales tumble 41% to $21.8 million, as sales of action figures and accessories based on Lord of The Rings and The Hulk movies decreased from a year ago.

Marvel confirmed that it still expects 2005 earnings in the range of $1.07 to $1.12 per share, in line with analysts’ projections.

Take-Two Interactive Software, Inc. (TTWO: chart) reported Thursday that its quarterly earnings soared 74% from a year ago, outpacing analysts’ expectations, driven by surging demand for its Grand Theft Auto: San Andreas game. The video game publisher announced a net profit of $55.2 million, or $1.19 per share, for the first quarter of fiscal 2005 ended January 31. The earnings powered past Wall Street’s consensus forecast of $1.09 per share. For the 2004 corresponding period, the company earned $31.8 million, or 70 cents per share. Quarterly revenue jumped 34% to $502.5 million from $375.5 million, due to strong holiday sales of the latest Grand Theft Auto videogame as well as solid sales of team sports simulators from the company’s 2K Sports unit. Analysts had called for revenue of $452.6 million, on average. Since its release in October, ‘San Andreas’ has sold 12 million units worldwide.

For its second quarter, however, New York-based Take-Two forecast a deeper loss of 20 cents per share, on revenue of $200 million to $210 million. That compares to an earlier guidance of a loss of 10 cents to 20 cents per share, on revenue of $170 million to $190 million. The company said a mix of investment spending and increases in marketing will have a negative impact on results. Analysts had expected a loss of 11 cents per share, on revenue of $182.4 million. For the third quarter, Take-Two pegged earnings at 5 cents to 15 cents a share, also below analysts’ mean estimate of 35 cents a share.

Company shares shed 45 cents on Thursday to $37.42. The stock rose 1.28% to $37.90 in after-hours trading.

Del Monte Foods Company (DLM: chart) of San Francisco, California, posted Thursday a 9.3% drop in its quarterly profits, hurt by higher costs for steel and energy. The food company reported net earnings of $48.5 million, or 23 cents a share, for its fiscal third quarter, down from $53.5 million, or 25 cents a share, last year. Excluding items, profits came to 24 cents a share, in line with analysts’ estimates. Sales for the quarter edged up 6.2% to $861.3 million, aided by price increases and new products.

The stock closed Thursday at $11.03, up 21 cents, or 1.94%.

Fleetwood Enterprises, Inc. (FLE: chart) announced Thursday a third-quarter net loss of $54.7 million, or 99 cents per share, in contrast to a loss of $10.2 million, or 26 cents per share, for the 2004 equivalent. The maker of recreational vehicles and manufactured housing blamed the widened loss on weak dealer demand and litigation costs. The mean analysts’ estimate was for a loss of 59 cents per share. The Riverside, California-based company recorded sales of $564.9 million in the third quarter, a 6% decline year-over-year.

Company shares plummeted 11.71% to close Thursday at $8.75.

Gottschalks, Inc. (GOT: chart) of Fresno, California, on Thursday turned in quarterly income that climbed 6% from a year earlier, helped by lower expenses, which outweighed a drop in sales. The department-store operator said it earned $9.0 million, or 66 cents a share, in its fourth quarter, against $8.4 million, or 64 cents a share, generated for the same period a year ago. Quarterly sales dipped 3.2% to $221.8 million, with same-store sales declining 2.6% from last year. Gottschalks is reviewing its lease-accounting practices, and said that the financial results for the quarter are subject to change, depending on the outcome of the review.

The stock inched down 2 cents to $8.97 at market close Thursday.

Weight Watchers International, Inc. (WTW: chart) said Thursday that its fourth-quarter net profit advanced to $43.2 million, or 41 cents a share, from a prior-year net profit of $38.1 million, or 35 cents a share. The Woodbury, New York-based provider of weight loss services said the 2004 fourth-quarter earnings include the results of its online affiliate and licensee. Without the impact of the consolidation of WeightWatchers.com, the company earned 32 cents a share, meeting analysts’ projections.

Company shares rose 2.05% to close Thursday at $44.33. The stock dropped 33 cents to $44.00 in after-market trade.
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