Pandemic Also Hurts Disney Movies, Cruise Biz

The coronavrius outbreak forced The Walt Disney Company to close theme parks, suspend cruises and delay movie releases. Disney said the pandemic reduced profit at its parks unit by $2.4 billion, reports Reuters. 

“Even with the disruption caused by COVID-19, we’ve been able to effectively manage our businesses while also taking bold, deliberate steps to position our company for greater long-term growth,” CEO Bob Chapek said in a statement.

The parks have started to welcome back visitors, though a rise in cases in Europe and the United States threatens that progress.

During the quarter, most of Disney’s theme parks, including its flagship resort in Florida, had reopened but with limited attendance, mask requirements and other safeguards. The parks and consumer products business lost $1.1 billion in operating income, less than analysts expected.

Disneyland in California has been shut since March, and Disneyland Paris was forced to close for a second time in October as virus cases spiked in France. The prospect of a coronavirus vaccine in 2021 could be crucial to the parks.

Chapek said Florida’s Walt Disney World had reduced the number of people who can visit to 35% of normal capacity. Thanksgiving week is close to fully reserved, he said.

The company also is seeing “very, very strong” demand for cruise ship bookings in the second half of fiscal 2021 and all of fiscal 2022, Chapek said.

At the media networks segment, the resumption of major sports helped boost ESPN. The unit reported $1.9 billion in operating income, up 5% from a year earlier.

Movie studio profit slumped 61% to $419 million, as the company delayed major films until 2021 and many theaters remained closed.

Disney said it will forgo its semi-annual dividend for the second half of fiscal 2020 to finance its streaming business.