Disney Quarterly Losses Mount, Even as Company Beats Expectations

Disney Quarterly Losses Mount, Even as Company Beats Expectations

November 15, 2020

Revenues plunged and profits atomized at the Walt Disney Company during its most recent quarterly earnings, as family entertainment giant continued to grapple with a pandemic that has destabilized the pillars of its business.

Disney’s revenues fell 23% to $14.7 billion, while the company reported a loss of $710 million instead of the $777 million in profits it recorded in the year-ago period. That translated to a loss of 20 cents per share compared to the 1.07 in earnings per share that the company reported in the same quarter in 2019.

Not that anyone is shocked by the red ink. From live events to theme parks to theatrical movies, there’s barely a corner of the Magic Kingdom that has not been hit hard by coronavirus. The company did tout the ongoing success of Disney Plus, its Netflix challenger, saying the streaming service had attracted 73 million paid subscribers since launching last November.

And yet, it could have been worse…much worse. Although Disney would no doubt like to turn the page on this period, investors were bracing for steeper losses. Wall Street projected revenues of $14.2 billion on a loss of 73 cents per share, numbers that the company beat. Indeed, the company’s stock rose sharply in after-hours trading on news of the better-than-expected results

Some of Disney’s resorts, such as Walt Disney World in Florida and Hong Kong Disneyland, have reopened, while instituting safety measures such as temperature checks and reduced capacity. Others, like Disney’s parks in California, remain shuttered. With revenue at a standstill, Disney recently laid off 28,000 workers across its parks and consumer products divisions.

Disney Plus, the company’s new streaming service, has been a rare bright spot. During the pandemic, subscriptions soared, in part due to buzzy programs such as Beyonce’s “Black is King” and a taped performance of Lin Manuel Miranda’s “Hamilton.” This month, Disney Plus launched the second season of “The Mandalorian,” a Star Wars spinoff series that was a watercolor hit when it debuted in 2019, back when it was safe for office workers to congregate around watercolors. In August, Disney said the service had attracted more than 60.5 million subscribers, an impressive result in less than a year of operation though a fraction of Netflix’s more than 200 million customers.

More to come…

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