Magnificent Marvel: Fool by Numbers

Earlier today, Motley Fool Stock Advisor pick Marvel Entertainment (NYSE: MVL  ) released earnings for the second quarter, which ended June 30.

  • The company's solid performance still didn't meet analyst expectations, as the stock is down more than 6% after the earnings release.
  • Marvel's balance sheet, meanwhile, looks almost picture-perfect. All remaining debt from share repurchases has been paid and cash and investments more than tripled from last summer.
  • Fools remain true believers. The professional and amateur stock-pickers following Marvel in our Motley Fool CAPS investor-intelligence database give it four out of five stars, which puts it in on par with fellow kid stocks Disney (NYSE: DIS  ) and Electronic Arts (Nasdaq: ERTS  ) . 

(Figures in thousands, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$101,475

$84,363

20.3%

Net Profit

$29,087

$16,297

78.5%

EPS

$0.34

$0.19

78.9%

Diluted Shares

 84,906

 86,746

(2.1%)

Get back to basics with a look at the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

85.71%

72.89%

12.82

Operating Margin

55.22%

31.47%

23.75

Net Margin

28.66%

19.32%

9.34

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$74,228

$10,997

575%

Accounts Rec.

$36,375

$59,777

(39.1%)

Inventory

$11,505

$13,614

(15.5%)

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$2,263

$6,913

(67.3%)

Long-Term Debt

$0

$96,700

(100%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$24,981

$81,079

(69.2%)

Capital Expenditures

$2,006

$12,494

(83.9%)

Free Cash Flow

$22,975

$68,585

(66.5%)

Free cash flow is a Fool's best friend.

Related Foolishness:

Marvel is one of the best stocks ever to enter the Stock Advisor portfolio, which also includes Electronic Arts. Get a 30-day free pass to the service to find out how David and Tom Gardner have engineered a 39-point drubbing of the S&P 500 over the past five years. There's no obligation to subscribe.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Tim Beyers owns shares of Marvel. He may buy more when The Motley Fool's disclosure policy allows. Find Tim's portfolio here and his latest blog commentary here.


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