Dow and S&P 500 open at record highs after Disney surprised markets with $17 billion in revenue as parks reopen and streaming booms, sending shares up 5%
The Dow and the S&P 500 opened at record highs on Friday after Disney reported surging revenue of $17 billion, keeping the indexes on track for a second straight week of gains.
At the opening bell on Friday, the Dow Jones Industrial Average rose 51.71 points, or 0.15 percent, to 35,551.56, while the S&P opened higher by 4.01 points, or 0.09 percent, at 4,464.84.
On Thursday, Disney said it had swung to a profit in its most recent quarter as reopened parks provided a revenue bounce and online streaming subscriptions boomed.
Revenue in the parks and products division surged to $4.3 billion from $1.1 billion a year ago, as theme parks closed last year were open for part or all of this year´s quarter.
The Dow and the S&P 500 opened at record highs on Friday after Disney reported surging revenue of $17 billion, up 45% from the same quarter last year
At the opening bell on Friday, the Dow Jones Industrial Average rose 51.71 points, or 0.15%
Disney World in Florida has been open since last summer, while California's Disneyland only came back at the end of April.
The effect of the pandemic lingers at the parks, many of which are operating at reduced capacities, the company says.
Disney is among the country's largest employers to require worker vaccinations. It also announced in July that visitors to its U.S. theme parks must again wear masks indoors.
Asked about concerns about the infectious Delta variant affecting the park business, Disney CEO Bob Chapek said on a call with analysts that the company sees 'strong demand' at the parks continuing, although there have been group and convention cancellations.
Disney's ability to keep its parks and resorts open 'is clearly of the utmost importance to their bottom line,' said Third Bridge analyst Joe McCormack.
Disney shares jumped more than 5 percent in early trading on Friday
Revenue in Disney's parks and products division surged to $4.3 billion from $1.1 billion a year ago, as theme parks closed last year were open for part or all of this year's second quarter
Disney on Thursday reported that its net income was $918 million in the three months through July 3, compared with a loss of $4.72 billion in its fiscal third quarter a year ago.
Earnings per share came to 50 cents, or 80 cents excluding one-time items, while revenue climbed 45% to $17.02 billion.
Analysts polled by FactSet predicted earnings of 55 cents per share on revenue of $16.76 billion. Disney shares jumped more than 5 percent in early trading on Friday.
Disney's online streaming services have also boomed as it grapples with how to release films while the Delta variant drives viewers from movie theaters.
Disney ended the quarter with 116 million Disney+ subscribers, about double the number from a year ago, and nearly 174 million streaming subscribers including Disney+, ESPN+ and Hulu.
Disney's kid-friendly back catalog and original hit series like Marvel's WandaVision and the Star Wars spinoff The Mandalorian have helped drive sign-ups as people stuck at home during the pandemic needed something to do.
Disney's kid-friendly back catalog and original hit series like Marvel's WandaVision and the Star Wars spinoff The Mandalorian have helped drive sign-ups for Disney+
Scarlett Johansson is suing Disney over its decision to release superhero movie Black Widow on streaming at the same time as in theaters
Revenue at Disney's media and entertainment distribution division, which includes the streaming services, the TV networks and the company's huge movie business, rose 18 percent to $12.68 billion.
Disney chief executive Bob Chapek said on an earnings call that a priority is to tell 'great stories' and win viewers by leveraging hit franchises such as its Marvel Cinematic Universe, Star Wars movies and shows, and Pixar animated features and shorts.
The pandemic prompted Disney to release some films on its streaming service when contracts and conditions allowed with a focus on remaining flexible, according to Chapek.
Scarlett Johansson is suing Disney over its decision to release superhero movie Black Widow on streaming at the same time as in theaters, alleging a breach of contract which cost the star millions of dollars.
Johansson, one of Hollywood's biggest and top-paid stars, was entitled to a percentage of box office receipts from the much-anticipated Marvel film, according to a lawsuit filed in Los Angeles Superior Court.
Chapek defended how Disney had delivered films to the public after Johannson's lawsuit and said the company will use all available options going forward
The film was originally due for a big-screen release last year, but was delayed multiple times due to the Covid-19 pandemic and was eventually released in July simultaneously in theaters and on Disney+.
Chapek defended how Disney had delivered films to the public and said the company will use all available options going forward.
He alluded to the Johansson suit, saying the company has 'figured out ways to fairly compensate our talent, so that no matter what the business model is that we have to go to market with, everybody feels satisfied.'
'We value flexibility in terms of making as many last minute calls as we can,' Chapek said about the future of theatrical releases for films.
Disney's tactics regarding theatrical releases of films will have a 'big impact' on the industry, according to Third Bridge senior analyst Joe McCormack.
Disney debuting all of its films simultaneously on its streaming service could potentially cut movie theater revenue in half, he said.