By Noah Rothstein

Walt Disney Co. shares soared to a four-month high on Aug. 13 as its U.S. theme parks business returned to profitability for the first time since the beginning of the pandemic.

“A supercharged U.S. consumer and the power of Disney drove earnings 25% ahead of expectations driven by Parks & Consumer Products,” wrote a team of Morgan Stanley analysts led by Benjamin Swinburne.

Disney CEO Bob Chapek said he’s bullish on the theme park’s future, noting that current reservations are above third-quarter attendance levels.

According to Fox Business, domestic theme parks booked a $2 million profit while international parks lost $210 million. Walt Disney World in Orlando, Florida, was open for the entire quarter, while the Disneyland Resort in Anaheim, California, was open for 72 days. U.S. hotel occupancy was 50%.

However, profit estimates for Disney’s theme parks and resorts have dropped sharply in recent weeks as the highly contagious delta variant of the COVID-19 virus spreads in areas with low vaccination rates and threatens to decrease travel demand. Some of the worst outbreaks have occurred in Disney World’s own state of Florida.

Recent increases in COVID-19 cases have prompted some group and convention cancellations. In recent weeks, the highly contagious delta variant has caused a resurgence in the virus, particularly in areas with low vaccination rates. On Wednesday, Aug. 11, the Centers for Disease Control and Prevention (CDC) said 90% of U.S. counties were experiencing substantial or high coronavirus transmission.

The resurrection of the theme park industry is critical to Disney’s bottom line.

According to CNBC, the segment, which includes cruises and hotels, accounted for 37% of the company’s $69.6 billion in total revenue in 2019. Normally, theme parks account for most of this revenue.

In the third quarter, parks, experiences, and products accounted for 25.5% of the company’s revenue. In the latest period, Disney earned 80 cents per share, after adjustments on revenue of $17.02 billion.

Disney’s domestic parks eased restrictions in April, which led to a boost in attendance. While guest capacity hasn’t returned to pre-pandemic levels yet, it has improved as state governments loosened mask mandates during the second quarter.

To combat delta variant infections, Disney has reinstated indoor mask requirements, regardless of vaccination status, for its theme-park customers, following guidance from the CDC.