* Q1 EPS, revenue beat estimates
* Raises full-year sales outlook
* Raises lower end of 2009 profit outlook
* Exec says 'Wolverine' film to generate revenue in 2009
* Shares rise 8.5 percent (Adds analyst and executive comment, updates shares)
By S. John Tilak
BANGALORE, May 5 (Reuters) - Marvel Entertainment Inc's MVL.N quarterly profit topped market estimates on strength at its licensing segment and DVD sales of "Iron Man" and "The Incredible Hulk," its first self-produced films, sending its shares up 8.5 percent.
The media company -- whose businesses include publishing, licensing and movies -- raised its 2009 sales outlook and the lower end of its profit forecast due to a strong start to its licensing and film production revenue and a fall in the anticipated tax rate.
"The pleasant surprise was that its licensing business was so much stronger a year after 'Iron Man' came out," Wedbush Morgan Securities analyst Michael Pachter said.
The results show that "Iron Man" is a very powerful brand, Pachter said. "They're building a brand and they're building it successfully."
First-quarter net income at the company, which started making its own films last year, fell to $44.5 million, or 57 cents a share, from $45.2 million, or 58 cents a share, a year ago.
Revenue rose 75 percent to $197 million. Analysts were looking for earnings of 37 cents a share, excluding exceptional items, on revenue of $138.2 million, according to Reuters Estimates. [ID:nWNAB3161]
The film production segment, made up of DVD sales of "Iron Man" and "The Incredible Hulk" films, contributed $90.4 million to revenue. Licensing revenue came in at $80.8 million, falling lower-than-expected on strength in interactive games and royalties from worldwide licensee sales.
"Our licensing business continues to perform very strongly and has not, to date, been dramatically negatively impacted by the global macroeconomy," Robert Steffens, Marvel's senior vice president, financial analysis, told Reuters.
For 2009, the company forecast earnings of $1.10 to $1.35 a share, lifting the lower end of its previous forecast by 10 cents a share.
"If you take a step back and see, the earnings guidance isn't going up. That's basically telling you that most of the beat is coming from timing -- earlier than expected recognition of revenue," Sterne, Agee & Leach analyst Arvind Bhatia said.
Full-year revenue is now expected to be $450 million to $485 million, up from a prior view of $415 million to $460 million.
Based on the outlook for the year, "This was far and away the largest quarter of performance," Marvel spokesman David Collins said. "So the subsequent quarters will be at lower levels.
With no catalysts in 2009 in the form of self-produced films, which allows Marvel to reap much higher levels of profit than when it just licences them, analysts and investors have set their sights on 2010. "No one is valuing Marvel on this year's earnings," Pachter said. "They're trying to understand how profitable the company can be when it gets into the swing of delivering two films every year."
Analysts have been looking to see if Marvel, whose profits used to be spun around its most well-known character, Spider-Man, can monetize and succeed with its non-Spider-Man brands.
Marvel will release an "Iron Man" sequel in 2010. "Thor" and the first "Avenger" movie, as well as "Spider-Man 4" is slated for a 2011 release. The "Avengers" sequel will follow in 2012.
The company is in the fifth week of shooting of "Iron Man 2" and the shooting should be done by mid-July, Steffens said. The cast of "Iron Man 2" includes Robert Downey Jr and Gwyneth Paltrow, Scarlett Johansson and Mickey Rourke.
While Marvel does not have any of its self-produced films slated for 2009, News Corp-owned (NWSA.O) 20th Century Fox's "X-Men Origins: Wolverine," a movie based on Marvel characters, hit theaters last weekend with the largest U.S. box office opening so far in 2009.
This year, Marvel will record Wolverine-related revenue from the movie, video game and animated TV series, which is airing on Nicktoons, Steffens said.
Shares of Marvel -- which has a portfolio of over 5000 characters, including Spider-Man and X-Men -- climbed $2.37 to $33.47 in afternoon trade Tuesday on the New York Stock Exchange, having gained 13 percent in the last month.
"Investors like the fact that these guys are proving that there's more to this company than just Spider-Man," Bhatia said. (Editing by Vinu Pilakkott and Savio D'Souza)