Shares of Walt Disney (DIS -0.03%) rose 5% on Friday. A strong opening performance from Black Panther: Wakanda Forever and reports that China was moving to ease its COVID restrictions helped to spur the rally.
The popular new Marvel movie generated $28 million from Thursday night previews in the U.S. and more than $30.8 million internationally. The encouraging debut has Black Panther: Wakanda Forever projected to earn over $200 million in ticket sales during its opening weekend.
The good news comes at a time when Disney and other movie producers have struggled with declining box office results. The movie industry has yet to fully recover from its pandemic-related downturn.
Fewer moviegoers have meant lower profits for Disney and other entertainment companies. A blockbuster performance from its latest superhero movie could provide the industry with a much-needed boost.
Investors also cheered reports of China's moves to roll back some of its COVID testing and quarantine requirements. The country's strict "zero-COVID" policy has resulted in many disruptions for companies that operate in China.
Disney has been forced to temporarily close its massive resort in Shanghai after fears of an outbreak surfaced. But if China continues to ease its virus-control measures, it's possible that the park could reopen soon.
Disney has embarked on several cost-cutting initiatives, including job cuts, due in part to COVID-related challenges and concerns regarding a potential recession. These measures, while painful, should help to bolster the media giant's profitability, particularly if its movie business and international theme park operations can regain their footing.