Disney Earnings: 42% Drop In Quarterly Revenue

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Walt Disney Co. posted its first quarterly loss since 2001, nearly $5 billion, as the majority of its business segments reeled from government efforts to corral the coronavirus by shutting down public spaces around the world, reports The Wall Street Journal.

The Covid-19 pandemic has closed Disney’s theme parks, virtually eliminated movie distribution and curtailed live sports, a key programming source for Disney TV networks. However, the world’s shut-in nature has helped the company’s Disney+ streaming service secure more than 60 million users in nearly nine months, a mark that Netflix took about eight years to achieve.

Disney said Tuesday it lost $4.72 billion in the three months ended June 27, compared with a profit of $1.43 billion in the year-earlier period. Total revenue fell 42% to $11.8 billion.

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The company’s prior quarterly loss, amounting to $567 million, came in early 2001, according to FactSet data.

Investors appeared to be more interested in the strong results from Disney+, which reported strong subscriber growth and next month will premiere the long-postponed live-action remake of “Mulan.” Disney shares rose about 5% in after-hours trading following the earnings release.

The shares have rallied more than 36% from their pandemic low in late March, according to FactSet, but are still off about 19% this year.

As expected, Disney’s theme-parks business was hit the hardest in the just-ended fiscal third quarter. The company estimated the pandemic had a $3.5 billion negative impact on the segment. The result was a $1.96 billion loss for the business, compared with $1.72 billion in operating income a year earlier. The company’s domestic parks, resorts, cruise lines and Disneyland Paris were closed during the entire period. Shanghai Disney Resort and Hong Kong Disneyland were able to operate for a portion of the quarter.

“We continue to work with national and local health and government officials in this very fluid situation and are making adjustments as necessary,” said Disney Chief Executive Bob Chapek.

Last month’s reopening of Walt Disney World theme park in Orlando, Fla., has so far been disappointing, finance chief Christine M. McCarthy said Tuesday.

“The upside we are seeing from reopening is less than we originally expected given the recent surge in Covid-19 cases in Florida,” she said on an earnings conference call. Less than a month ago, Walt Disney World reopened at reduced capacity and with heightened safety measures.

Disney postponed plans to open Disneyland in Anaheim, Calif., after the state canceled its plan to allow the park to reopen at limited capacity, amid fears that reopening other public spaces too soon had caused a resurgence in Covid-19 cases.