Disney reports $5 billion quarterly loss as revenues tumble

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Disney+

While many entertainment companies have seen their shares soar over the past few months with more people stay at home, not all companies have enjoyed the same success. Streaming services, video-game companies, and other similar service providers are doing quite well so far this year, while more offline-based companies have struggled. In contrast, Walt Disney (NYSE: DIS) ended up reporting a massive $5 billion quarterly loss as the company’s revenue figures continue to fall.

Many of Disney’s physical locations, such as its theme-parks, have remained closed for the past few months due to the coronavirus. Having only recently opened back up with strict social-distancing measures, it still expects that revenues from this aspect of Disney’s business to remain quite small.

The company ended up reporting a third-quarter loss of $4.72 billion, substantially worse than the $1.4 billion quarterly profit seen around the same time last year. Disney ended up saying its theme-park business, in particular, saw a $2.0 billion loss, while the remaining $2.7 billion was due to other areas of the company being affected by COVID-19. The latter includes cruise lines, resorts, as well as various parks that have also seen their revenue figures tumble due to the coronavirus.

Disney’s CEO, Bob Chapek, went on to say that they were planning to launch their anticipated Mulan film remake as a pay-per-view option rather than going through traditional cinemas. “We see this as an opportunity to bring this incredible film to a broad audience currently unable to go to movie theaters, while also further enhancing the value and attractiveness of a Disney+ subscription,” Chapek went on to say during a company conference call with analysts, adding that this would be a one-time thing and not a reoccurring pattern.

Disney further confirmed that it had 57.5 million paid subscribers to its Disney+ program. That’s a substantial improvement from just three months ago, where the company stated it had just 26.5 million paying subscribers by the end of its second fiscal quarter.

Shares of Disney are surprisingly up around 5% in after-hours trading on Tuesday, seemingly indifferent to the news. Overall, however, Disney’s stock still is down quite a bit in comparison to the start of the year. Other companies, such as Netflix, have seen a surge of new subscribers, with the company has seen its stock almost double over the past few months.

 

Walt Disney Company Profile

The Walt Disney Co owns the rights to some of the most globally recognized characters, from Mickey Mouse to Luke Skywalker. These characters and others are featured in several Disney theme parks around the world. Disney makes live-action and animated films under studios such as Pixar, Marvel, and Lucasfilm and also operates media networks including ESPN and several TV production studios. Disney recently reorganized into four segments with one new segment: direct-to-consumer and international. The new segment includes the two announced OTT offerings, ESPN+ and the Disney SVOD service. The plan also combines two segments, parks and resorts and consumer products, into one. The media networks group contains the U.S. cable channels and ABC. The studio segment holds the movie production assets. – Warrior Trading News

 

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