Motley Fool takes a look at Marvel’s prospects for 2007, focusing on the theatrical releases of Ghost Rider, Spider-Man 3 and the second Fantastic Four film:
Marvel projects 2007 per-share earnings of $1.35 to $1.55. It’s a good bet much of that will derive from licensing and merchandise sales from Spider-Man 3, which will be released on May 4 and which looks outstanding. Ghost Rider, if successful, would further lower the bar to meeting expectations.
Meanwhile, Marvel has once again teamed with News Corp.’s Fox to produce Fantastic Four 2. This time, the big screen will bring to life what may be the classic comic-book story. An alien scout for a world-eater comes to Earth. He and the FF do battle with the lives of billions of people at stake. Sound fantastic? That’s why Stan Lee and Jack Kirby named the quartet the Fantastic Four, Fool.
2007 will be a critical year for Marvel films, as spending will ramp up on Hulk and Iron Man over the next year:
Marvel’s 2008 films — Iron Man and The Incredible Hulk — are to be financed through a $525 million credit facility that is already piling up interest at an unknown rate (8% seems likely). There’s good and bad to this arrangement.
First, the good: The facility is self-contained. Movie revenues would be used to pay down debt. Therefore, a profitable hit would pay for itself while preserving Marvel’s relatively clean balance sheet.
Now, the bad: If Iron Man or The Incredible Hulk (or both) flop, then the facility could keep piling up interest as Marvel waits for a billion-dollar blockbuster to come to the rescue. That would be an unprecedented string of bad luck for mighty Marvel. But it’s at least worth mentioning, because spending will ramp up during 2007.
Spider-Man 3 looks pretty amazing, so the question isn’t will it do well, but how well will it do. I think it has the potential to reclaim the top-grossing opening weekend spot for the franchise, which was lost to the second Pirates movie earlier this year. (Of course, the third Pirates or Shrek movie could turn around and take it right back when it opens). And maybe even the top-grossing movie of the year spot (again, if it can beat out the third Pirates movie and the third Shrek). And I really had no desire to see the second FF movie and probably would have waited for it on cable or DVD, until I saw the Silver Surfer trailer.
Ghost Rider is a little more of a wildcard … I’m expecting it to be on the level of Elektra or Daredevil, but maybe it’ll be a surprise like the first Blade was. Maybe … I’m not really getting my hopes up. I guess we’ll know sooner rather than later, since it opens in just a little more than a month.
