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Marvel's Big Weekend

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By Rick Aristotle Munarriz (TMF Edible)
May 5, 2003

The summer movie season kicked off early as X2: X-Men United rocked the box office over the weekend. Taking in just shy of $86 million in movie ticket sales across North America and $155 million worldwide, the eagerly anticipated sequel from the potent Marvel (NYSE: MVL) franchise now owns the fourth-best debut in domestic celluloid history.

Perched at the top of the list is another Marvel superhero -- Spider-Man -- with a pair of Harry Potter movies sandwiched in between. The fact that the new release has been that rare follow-up to garner more critical praise than the original has certainly helped the fortunes of the movie studio behind the film, News Corp. (NYSE: NWS) subsidiary Fox Entertainment (NYSE: FOX).  

However, the big winner has been Marvel itself. This becomes its sixth consecutive licensed release to open as the top draw at the local multiplex after Spider-Man, Daredevil, Blade, Blade 2, and the original X-Men. For a company that was little more than a comic-book specialist making toys on the side, Marvel has come a long way.

Since allowing Hollywood to start tapping into its lush library of characters for flick fodder, Marvel's finances have started to brighten along with its future. Gone is the bulk of the company's restrictive debt and prohibitive preferred stock infrastructure.

While it simply collects royalties from the respective studios, its winning streak assures even meatier percentage cuts and larger merchandising contracts in the future. With next month's release of Hulk and its more than 300 licensee pacts, Marvel will be looking at even more green this summer.

Investors have been rewarded by the equity's superhero performance. The stock has more than quadrupled off last year's lows. The company is set to report its first-quarter earnings tomorrow morning. Over the past year, it has been raising its guidance as it strips down its debt, so it will be important to note if its 2003 outlook differs from its projections back in March, which called for earnings per share between $0.64 and $0.69 on $215 million in revenue.

As it stands, Marvel has been a market mutant, soaring while so many other stocks have languished. That's a breathtaking action sequence that would surely have Wolverine, Storm, Mystique, and the rest of the X-Men characters watching in admiration.

Did you duke it out with the opening weekend crowds to check out X2 or will you wait it out? Which films are you looking forward to this summer? Renting any of last year's blockbusters? All this and more -- in the Marvel discussion board. Only on Fool.com.

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