Tue Feb 27, 2007 — by Glenn Hauman

Marvel's 4th quarter

Publishing up, profits down

Here's the good news: Marvel's publishing segment ended 2006 on a strong note with sales up 22% to $28.6 million and operating income ahead 35% to $11.6 million in the fourth quarter. For the full year, operating income rose 21% to $44.1 million, on a 17% sales increase to $108.5 million.

Trade paperbacks and hardcovers sold into both the book channel and the direct market led the gains. In the fourth quarter, comic book sales were bolstered by sales associated with Civil War. Sales also benefited from a strong increase in custom publishing sales. Marvel said that for 2007 it expects modest top-line and bottom-line growth from the publishing division.

And if all Marvel made its money from was its publishing arm, that would be great. However, Marvel makes the vast amount of its income from licensing -- and here, it got clobbered. Its fourth-quarter net sales were $25.5 million, down from $81.7 million the year-ago period.

All told, Marvel Entertainment's fourth-quarter net income dropped to $11.7 million, or 14 cents per share, from $25.9 million, or 26 cents per share, last year.

This has led to the stock price getting hammered: Shares of the Marvel closed Monday down 95 cents, or 3.1%, at $29.96, with a further drop on Tuesday of $1.63, or 5.4%, to close at $28.33.

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