Disney's (DIS) television business may be in an uncertain transition with the decline of ESPN, but fortunately for The Mouse House, its film operation is on fire.

Beauty and the Beast generated a stunning $170 million at U.S. movie theatre over the weekend, eclipsing movie analysts' forecast for box-office sales in the range of $130 million to $150 million. Beauty's record-breaking debut for a Disney film follows a year in which the world's largest entertainment company posted the three biggest U.S. movies of 2016: Rogue One: A Star Wars Story, Finding Dory and Captain America: Civil War.

The animation film starring Emma Watson as Belle and Dan Stevens of Downtown Abbey as the prince marked the seventh time the company has debuted a movie that totaled more than $150 million in its opening weekend. Looking ahead, Disney will release sequels this year for its Star Wars and Avengers franchises.

For Disney CEO Bob Iger, the ability to of its movie studios to consistently generate worldwide blockbusters is providing the company some leeway as it works through a transition for its cable-TV group, led by ESPN. Disney's film group, which includes Marvel and Pixar but uses the umbrella name of Buena Vista, had box-office sales of $3 billion, or 26% of all worldwide movie sales last year. With another $180 million from outside the U.S., Beauty and the Beast is expected to top $1 billion worldwide. 

By contrast, Disney's networks group, the company's largest unit, posted a 2% decline in sales in the fourth quarter, as ESPN reported that pay-TV subscribers to the country's most popular sports channel had fallen to 88.4 million, compared with 2010, when the network was drawing fees from more than 100 million subscribers. Mindful of declining revenue at ESPN, Disney began a review of its on-air hosts and commentators with an eye toward lowering expenses to offset expensive sports rights contracts topped by the nine-year, $24-billion deal signed in 2014 with the National Basketball Association.

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Concerns about Disney's television business have dogged Iger and Disney executives for more than two years. Quarterly conference calls with Wall Street analysts are often peppered with questions about ESPN's subscriber declines coupled with escalating sports rights contracts. While Disney shares have gained 13% over the past year, it still trails the S&P 500, which has jumped 16% over the same time period.

Nonetheless, Disney's film group remains a juggernaut. It's the main reason that Guggenheim Securities media analyst Michael Morris last week upgraded shares in the company to a buy, despite trading at a comparatively rich valuation of 19.5 times estimated earnings.

"The robust catalyst pipeline is likely to keep the positive elements of the Disney story at the top of mind for a broad set of investors through the end of the year," Morris wrote in a March investor note. Disney looks to be similarly well-positioned next year with sequels to FrozenToy Story and the latest Indiana Jones film. 

Ironically, this was supposed to be a middling year for Disney. 

Iger back in November warned investors that fiscal 2017, which began Oct. 1, was "going to be an anomaly." Factors that likely would drag on earnings included higher costs at ESPN from a new NBA contract and difficult comparisons to 2016 results which rode the success of  Star Wars: The Force Awakens. Results for the next three quarters may end up trailing 2016 earnings, but Morris insisted Disney's prospects are sufficiently buoyant to warrant an upgrade.
 
Shares of Disney were gaining 0.7% to $111.76 in pre-market trading.

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