NEWS: Disney Parks Lost Billions in Late 2020

Today, Disney is hosting a quarterly earnings call to discuss the company’s financial standings.

Disney’s last earnings call took place in November. This earnings call and its associated report cover the first fiscal quarter of Disney’s 2021 fiscal year — which began around October and ended in January of 2021. The company is now sharing updates about the impacts of the global pandemic on its financial status and more. The Q1 earnings call and report will likely include LOTS of news, so we’re throwing it all together for you here!

Current Financial Standing

One of the most notable announcements regarding the Walt Disney Company’s current standing was that its diluted earnings per share (EPS) from continuing operations for the quarter decreased 98% to $0.02 from $1.17 in the prior-year quarter. Disney has noted that its results in the quarter were adversely impacted by COVID-19, with the most significant impact being in the Disney Parks, Experiences, and Products segment.

But, Bob Chapek, the Chief Executive Officer of the Walt Disney Company had a positive outlook on Disney’s future success. In the earnings report, Chapek says, “We believe the strategic actions we’re taking to transform our Company will fuel our growth and enhance shareholder value, as demonstrated by the incredible strides we’ve made in our DTC [(Direct to Consumer)] business, reaching more than 146 million total paid subscriptions across our streaming services at the end of the quarter.”

Disney Parks, Experiences & Products

Although Disney World has been open for months now, other parks around the world remain closed. Disney reports that in the current quarter, its theme parks were either closed or open, but operating at significantly reduced capacity. Its cruise ship sailings and guided tours have also been suspended. Several theatrical releases have also been delayed or canceled, and stage play performances have been suspended. All of this has impacted the Disney’s financial status this quarter.

Disney has noted that they have also “incurred, and will continue to incur, additional costs to address government regulations and implement safety measures for our employees, talent and guests.” 

Overall, Disney said that the “most significant impact on operating income in the current quarter from COVID-19 was an estimated detriment of approximately $2.6 billion at the Disney Parks, Experiences and Products segment due to revenue lost as a result of the closures and reduced operating capacities.”

Overall, for the Disney Parks, Experiences and Products division — revenues for the quarter decreased 53% to $3.6 billion. Segment operating results decreased $2.6 billion to a loss of $119 million.

Disney Media and Entertainment Division

In terms of Media and Entertainment, Disney noted that the impacts of COVID-19 were somewhat less significant. The segment saw a decrease in operating income of just 2%. Last year’s reported income was approximately $1.5 billion and this year’s income was approximately $1.45 billion

Direct-to-Consumer and Disney+

Last year, Disney CEO Bob Chapek shared that the company would be shifting a lot of its focus to direct-to-consumer products. And in terms of its financial report, Disney’s Direct-to-Consumer business is doing quite well.

Overall, the improvement at Disney+ was driven by a 350% increase in subscribers. As of January 2nd, 2021, Disney+ actually had 94.9 million paid subscribers.

Next Steps

As the company pushes forward into the remainder of the fiscal year, they expect to spend approximately $1 billion on health measures for fiscal 2021. This amounts to implementing measures to protect guests, talent, and team members.

As Disney continues to make changes to its business operations, we’ll be sure to share all the updates you need to know!

Disney Will Be Closing One of Its Animation Studios

Did you listen in to the earnings call? Tell us in the comments!

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