Marvel Shares Rocket to New Highs

Shares of Marvel Entertainment(MVL Quote) surged to new 52-week highs Monday after the company once again beat earnings estimates and reported a very strong opening weekend for its Iron Man film.

Marvel's first-quarter earnings beat estimates by 15 cents a share, and the company has now surpassed estimates in nine of its last 10 quarters.

Meanwhile, Iron Man proved to be a blockbuster at the box office, grossing $100 million in the U.S. in its first weekend. This is the second-best debut ever for a non-sequel film (second only to Marvel's first Spider-Man movie), Marvel said in a release.

Marvel Needs 'Iron Man' to Do Some Heavy Lifting

In morning trading, Marvel shares rose 7.4%, or $2.23, to $32.48.

The strong Iron Man opening could create substantial earnings power at Marvel. This is the first film Marvel is financing on its own, which allows for significant operating leverage, since much of a film's costs are fixed. (In the past, the company licensed out its characters to movie studios like Sony (SNE Quote) with Spider-Man, and lost out on much of the upside.)

The strong showing also lays to rest some of Marvel's critics, who said the company's best days were behind it -- since Marvel has already released three Spider-Man movies and three X-Men films.

Marvel on Monday announced it will release an Iron Man sequel in 2010, along with a movie based on its Thor superhero character.

For its latest quarter, which does not yet include much Iron Man profits, Marvel said earnings totaled $45 million, or 58 cents a share, beating the 43-cent target that analysts expected, according to Thomson Financial. A year ago, profit totaled $46.8 million, or 54 cents a share, helped by early contributions from Spider-Man 3.

Marvel remains a compelling stock to eye, as the very strong Iron Man opening adds to an already attractive operating business.