Coronavirus took a big chunk out of the Walt Disney Company’s profits during its most recent quarterly results, but the popularity of Disney Plus helped cushion the blow of the pandemic. It also helped the company beat Wall Street’s diminished expectations.
The family entertainment giant reported adjusted earnings per share of 32 cents for the period ending on January 2, down from $1.53 from the year-ago period. That’s a significant decline, but not the losses that the investment community had expected to see. Revenues at the conglomerate dropped 22% from $20.9 billion to $16.2 billion.
The report comes as the COVID-19 public health crisis has upended several key tenets of the company’s business, shuttering many of its theme parks, waylaying its cruise lines, halting its Broadway productions, and devastating the theatrical film business. The park closures have been particularly painful, resulting in an estimated $2.6 billion hit in lost operating income.
And yet, Disney has largely endured those setbacks, its stock continuing to rise to record levels even as the company kept pushing back the release of movies and its parks remained closed or sparsely attended. Investors remain focused on the robust growth of its streaming offerings, particularly Disney Plus, its buzziest Netflix challenger. In December, Disney said the platform had 86.2 million subscribers — this quarter that number grew to 94.9 million subscribers. Disney credited the streaming service’s release of Pixar’s “Soul” and the second season of “The Mandalorian” with attracting new users. Across all of its services, which also include Hulu and ESPN+, Disney had 146 million subscribers.
Most of these streaming services have yet to make money, but they are losing much less than they once did. Revenues for the direct-to-consumer division increased 73% to $3.5 billion and operating losses decreased from $1.1 billion to $466 million. Disney Media and Entertainment Distribution, which encompasses Disney’s streaming as well as its film and television businesses and its licensing arm, saw revenue drop 5% to $12.6 billion, while operating income dipped 2% to $1.45 billion.
Analysts were expecting the company to report revenue of $15.92 billion and a loss of 38 cents per share. Disney Plus was projected to attract just over 90 million subscribers — a figure it handily beat. Disney’s shares rose roughly 3% in after hours trading on the strength of its report.
With its cruises suspended and parks in California, Hong Kong, and Paris closed, Disney’s parks, experiences and products segment saw revenues for the quarter decrease 53% to $3.6 billion. They reported a loss of $119 million.
More to come…
Source: Read Full Article