One of the most recent box office explosions, “Black Panther” has proven to be more than just excellent cinematic artistry, but a great profit boost for Walt Disney Co. [NYSE: DIS]. Their second quarter profits have soared past estimates predicted by Wall Street advancing to USD$1.84 in earnings per share, while sales rose to USD$14.5 billion, compared with predictions of USD$14.1 billion. The worldwide movie phenomenon boasted USD$1.3 billion in ticket sales since its release in February and is still playing in theatres across the globe. These numbers have caused a ripple effect for Walt Disney Co. through an increase in theme park visits during a typically slow season as well as the boost to a television business that’s being negatively affected from an overall decline in pay-TV viewership.
Additionally, more movie releases, such as “Avengers: Infinity War” and the upcoming “Solo: A Star Wars”, can assure the company’s profits for the first half of the year in their studio segment. Up to May 6, 2018, Disney is responsible for a third of the domestic movie business, as reported by Box Office Mojo.
Regardless, Walt Disney Co. faces an uphill battle with their cable division, as it portrayed a 4 percent loss is profits year over year. They are currently taking steps to boost earnings in this segment through the acquisition of 21st Century Fox Inc., but they face significant competition as U.S. cable company Comcast Inc. is rumoured to also place a bid for said company. This among other factors has propelled the company’s stock price to remain largely stagnant in recent years. Strong competition from companies such as Amazon.com Inc. [NASDAQ: AMZN] and Netflix Inc. [NASDAQ: NFLX] has ignited investor uncertainty, which caused the stock price to average about USD$100. This price has caused SSL to recommend it as a buy for clients. The company has the potential to increase share value if their current investments are successful along with the benefits they are set to reap with the present movie releases and increased ticket prices and sales to theme parks.
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