Absent current blockbuster film projects, Marvel Entertainment's (NYSE: MVL) earnings were still respectable for the second quarter. Without new hit movies such as Iron Man and the Incredible Hulk, which were released last year, the comic book and film company still managed to bring in decent revenue, though both revenue and profits were down. More interesting to investors is what is on the horizon for the company known for its super-heroes.

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A Down Quarter
Marvel's revenues were off for this quarter, down to $116.3 million, compared to $156.9 million for last year's same second quarter, with earnings of $29 million, or 37 cents a share, compred to $46.7 million or 59 cents in last year's quarter. Marvel's guidance for the year is for $1.25 to $1.35. When you consider that Marvel achieved these earnings on the basis of simply running its day-to-day publishing business with its comics and that the bulk of the earnings from its blockbuster films have already been booked, these are still good numbers during a severe recession.

Other Media Players
Marvel's 38% dip in profits isn't that unusual for entertainment companies in this economic climate. Time Warner (NYSE: TWX), with its sprawling properties, had declining revenues from its film and publishing segments, and after spinning off Time Warner Cable (NYSE: TWC) is only now getting around to spinning off AOL. It can be argued that Time Warner has never yet found the formula to fit its assets together.

Entertainment behemoth Disney (NYSE: DIS) continues to feel its way through the recession, as its mix of films, amusement parks and television networks all continue to produce uneven revenues for now. The long-term strength of Disney's properties or operations, though, is still hard to dispute.

Smaller entertainment companies, such as toymaker Hasbro (NYSE: HAS), are making inroads into the film business with their successful Transformer and GI Joe properties. Now Hasbro is set to make its entry into television with its own studio productions in conjunction with Discovery Communications. Though these start-up costs have perhaps dampened Hasbro's profits in the near-term, this could be a successful venture which ties in well with its current properties. This is a contrast with the non-synergistic elements of much of Time Warner's far flung segments, for example.

Marvel Loads Up
Marvel is gearing up for Iron Man 2, the sequel to its successful Iron Man movie, and continues to produce robust sales in its comic book publishing operations, the cornerstone of its business. It has now fully ventured into film-making, as it will be making its films instead of joining with other studios. Marvel's film studio operation can itself become a formidable player, as compared to such small, quirky entertainment studios like Lionsgate Films (NYSE: LGF), which are favored by investor Carl Ichan, but can be outstripped by Marvel's movies which can generate huge money. Marvel's proceeds from the first Iron Man film not only went into the company coffers, but were enough to help pay down debt. That's a bonus in recessionary times.

Make Yours Marvel?
Years ago, Marvel's creator, the irrepressible Stan Lee, coined the phrase "make mine Marvel," in reference to the iconic comics such as Spider-Man and the Fantastic Four he was so integral in creating. Can investors say the same now? The stock has been run up to near its 52-week high, despite the recession, the lousy stock market and Marvel's somewhat tepid recent earnings. It seems that long-term value investors, if not short-term traders, know the value of this company and its vast potential, both near and far term. Watch for pull backs in this stock in order to grab one of the most focused, innovative and successful entertainment companies there are. (For more, see The Value Investor's Handbook.)

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