Disney takes $1.4 billion hit from coronavirus as parks, theaters close

Lawrence Kim
May 6, 2020

CFO Christine McCarthy said the board made the decision to forgo a dividend payment for the first half of the fiscal year that would have been applied in July.

Shares of Disney fell almost 2 percent in after-hours trading as Wall Street had been expecting adjusted earnings of 88 cents a share, excluding items.

In a conference call with analysts, CEO Bob Chapek said Disney plans to reopen its Disney Shanghai park on May 11. The blows proved to have all the more sting on Tuesday when the Q2 reports revealed profits to have cratered 91% from past year.

"In total, we estimate that the COVID-19 impacts on our current quarter income from continuing operations before income taxes across all of our businesses was as much as $1.4 billion", Disney said, adding that $1 billion of that came from losses at theme parks.

Disney's stock hit at an all-time high before the pandemic. Disney has a long history of consistent dividend payments that goes back over 40 years.

Disney+, the company's new streaming service, however, has benefitted from the global quarantines imposed to slow the virus. Disney+ had 54.5 million paying subscribers as of May 4, up from 50 million on April 8.

One bright spot was its Disney Plus streaming service, which contributed to an nearly $3 billion revenue increase for direct-to-consumer and worldwide business.

The company reported a 58 percent drop in operating income for the segment this quarter compared to the same period previous year. That was a 7% increase from a year earlier, boosted in part by the addition of the FX and National Geographic Networks purchased from 21st Century Fox. Disney released Pixar movie "Onward" just before theaters closed, then quickly moved it to video on demand for home viewers.

Revenue rose 20.7 percent to $18.01 billion for the quarter ended March 28, above Wall Street's expectations for sales of $17.81 billion.

Other reports by Click Lancashire

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