Disney revenue drops 42pc, missing expectations

BURBANK, CALIFORNIA (AP) — Walt Disney Co reported that its net income fell dramatically in the three-month period that ended in June when most of its theme parks were shuttered and theatrical movie releases were postponed.

Still, its bottom-line results were better than analysts expected, although its revenue fell short of forecasts.

Disney soared to success with the breadth of its media and entertainment offerings, but now it is trying to recover after the coronavirus pandemic pummelled many of its businesses. It was hit by several months of its parks and stores being closed, cruise ships idled, movie releases postponed and a halt in film and video production.

For quarter that ended on June 27, the company based in Burbank, California, posted a loss of USD4.84 billion, or USD2.61 per share, compared to a profit of 79 cents in the prior year quarter. Adjusted to exclude one-time items such as restructuring costs and impairment charges, net income came to eight cents per share. Analysts expected an adjusted loss of 64 cents per share, according to FactSet.

Revenue fell 42 per cent to USD11.78 billion, missing analyst expectations of USD12.39 billion, according to FactSet.

Park guests enter the Magic Kingdom during the re-opening of Walt Disney World in Lake Buena Vista, Florida. PHOTO: AP

Disney has been opening its parks back up around the globe, but most were still shuttered during the company’s fiscal third quarter.

In May, it opened Disney Springs, a complex of shops, restaurants and entertainment venues in Lake Buena Vista, Florida. Hong Kong Disneyland re-opened in June, but closed again after a month due to an outbreak in the city.

It re-opened Walt Disney World’s Magic Kingdom and Animal Kingdom, Epcot and Disney’s Hollywood Studios in Orlando, Florida, in July.

Disney said closing its parks cost it USD3.5 billion during the quarter.

The streaming service Disney Plus continued to be a bright spot.

Disney reported Disney Plus, which costs USD7 a month, had 57.5 million paid subscribers as of June 27. On a call with analysts, CEO Bob Chapek said that number reached 60.5 million as of Monday. The service debuted in November in the United States (US) and rolled out to the the United Kingdom (UK) and other parts of Europe last month. Disney Plus, Hulu and ESPN Plus combined reached over 100 million subscribers, the company said.

Netflix, by contrast, has about 183 million subscribers, a base it has spent years building. Disney said it will debut the much-delayed live action version of Mulan on September 4 on Disney Plus, but subscribers will have to pay USD30 to watch it.

They also said it will be released in theatres in some markets where theatres are open. It also said it will launch a general entertainment streaming service in international markets under the brand Star.