(RTTNews) - Character-based entertainment company Marvel Entertainment(MVL: News ), which agreed to be bought by Walt Disney (DIS: News ) over the summer, reported Tuesday a large drop in profit for the third quarter, hurt by a decline in feature film activity and related licensing.

Earnings per share for the quarter dropped nearly 60%, but topped analysts' expectations by two cents. Quarterly net sales also dropped and missed consensus estimate.

Marvel Entertainment has created at least 5,000 characters, including Spider-Man, Iron Man, Captain America, Hulk, X-Men. Marvel is part of a joint venture with Sony Pictures Entertainment Inc., called Spider-Man Merchandising L.P. related to Spider-Man movie related licensed products.

The global economic downturn that uprooted several businesses has also hurt the entertainment business. Meanwhile, Marvel is now trying to be more vibrant in the company of Paramount Pictures, which would now distribute five of its movies including Iron Man 2 on May 7, 2010.

On August 31, Walt Disney Co. (DIS) agreed to acquire Marvel, subject to Marvel shareholder approval and other customary closing conditions, in a stock and cash transaction valued at about $4 billion. The company continues to anticipate closure of the deal by calendar year end. Under the deal, Disney will acquire ownership of more than 5,000 Marvel comic-book characters, including Iron Man, Spider-Man, X-Men and Captain America. The boards of directors of both Disney and Marvel have each approved the transaction.

The company added that Disney is the ideal home to nurture and further develop the distinctive Marvel brands because of its ability to extend the breadth, diversity and global reach of Marvel-branded entertainment and consumer products.
In statement, chairman, Morton Handel said, "Despite the absence of any Marvel Studios feature film releases in 2009, Marvel continued to deliver solid operating performance across all our operating segments. Anticipation for the high profile Iron Man 2 feature film continues to build, and we are focusing our efforts on the film's May 2010 release and the related licensing opportunities."

Third Quarter Results

The New York-based creator of superhero movies reported net income of $20.42 million or $0.26 per share for the third quarter, sharply lower than $50.63 million or $0.64 per share in the prior-year quarter.

On average, nineteen analysts polled by Thomson Reuters expected earnings of $0.24 per share for the third quarter. Analysts' estimate typically excludes one-time items.

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