It is said that will power, persistence, courage and kindness are the only things considered necessary to recover from any adverse situation, which stands true considering the current scenario of Japan as their life is slowly coming on track backed by their incredible works of bravery, humanity and compassion making it an inspiration for the world.
Following the Japanese spirit, The Walt Disney Company (DIS) resumed few operations, which were closed down due to the earthquake and tsunami that ripped apart the northeastern part of the country. However, theme parks and Tokyo DisneySea operations will remain suspended as of now, Associated Press reported.
Earlier, the company discontinued its organizational operations in Japanas a safety measure taken to protect its employees and their families.
Oriental Land, which pays royalty to Disney as per their licensing conformity, made a broad evaluation of the parks and resorts and reported that there have been no morphological damages apart from the governments’ statutory control on transport and power that had an impact upon the business.
However, the company witnessed a physical change in a part of its parking area, which was even and smooth prior to the tremor.
Japan’s Disneyland is an integral part of the Disney’s parks & resorts segment as it derives a healthy amount of profit in the form of licensing revenue from Oriental Land group of Japan. Thus, the amount of revenue loss is expected to be high and is likely to weigh upon the financial results of the company in the coming quarters.
Walt Disney is one of the world’s leading diversified entertainment companies. Moreover, the company commands a formidable portfolio of globally recognized brands, such as Walt Disney, ABC, ESPN, Marvel Entertainment, and Touchstone Pictures, which provides it a strong competitive advantage and strengthens its position in the market against key players like News Corporation (NWS) and Time Warner Inc. (TWX).
The company intends to increase its investments in the video games industry, which has been generating higher sales compared to box-office sales in the United States. This is quite evident from the company’s acquisition of Tapulous, a software and video game developer and Playdom, one of the biggest makers of social games on the internet.
Followed by a broad evaluation, we prefer to maintain a long-term ‘Outperform’ recommendation on the stock. Disney also holds a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating.
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