From The Motley Fool:

Walt Disney crushed analyst expectations on May 5, reporting positive surprises on both the top and bottom lines. Stabilized by this fine second-quarter report, Disney shares continue to ride high. Current share prices sit just below Disney's all-time highs, and the stock has more than tripled in value over the last five years.

The numbers seldom tell the whole story, though. Serious Disney investors would be wise to listen in on the company's earnings call with Wall Street analysts, when analysts were given the chance to ask probing questions and management explained the quarter in far greater detail than the simple earnings report.

The magic of MagicBands
CEO Bob Iger loves the way Disney's MagicBands have improved the visitor experience at Disney World, but he can't quite put a finger on how much the system is helping his business:
MyMagic+ has had an impact, especially as we've now sort of anniversary-ed the start-up costs that we had there. And it really is integrated into the total Walt Disney World guest experience. So it's difficult to say just how much it contributed because it's so integrated, but it clearly was a contributor to results. Roughly half of our guests now are entering the parks with MagicBands, and the response from those guests has been overwhelmingly positive. So we're very pleased with that.

MagicBands or MyMagic+ has been a driver. Going forward, it will still be a factor but perhaps not with as great an impact as we've seen in this quarter. Again, it becomes even more integrated into the base experience.
For those unfamiliar with MagicBands, they are Disney's way of dipping a toe into the trillion-dollar waters of the Internet of Things.

Disney World guests can set up their park experience days or weeks in advance, then link their plans to a smart bracelet that's worn in the park. Disney's systems always know what you like, where you are, and which of your favorite rides have the shortest lines. The bracelet nudges you in all the right directions, shortening the time spent waiting in line under the merciless Florida sun.

"Any sufficiently advanced technology is indistinguishable from magic," in the words of Arthur C. Clarke. That's the feeling Disney is aiming for here. Happy guests spend more money at the resort -- and from their perspective, the magic is real.

Despite tough currency exchange effects dampening Disney's overseas results, the parks and resorts division recorded 6% year-over-year sales growth in the second quarter. Operating profits for that segment rose a staggering 24%. According to Disney, these results sprung from higher ticket prices plus "increased food, beverage and merchandise spending."

As Iger explained, it's hard to tease out exactly how much the MagicBands lifted the average spending levels, but it's an undeniable growth driver. I would be shocked if Disney didn't roll some version of MagicBands out across all of its parks, resorts, and cruise ships over the next couple of years. As a Disney shareholder, I'd even be downright disappointed.

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