Breaking News

Disney's profit plunged 91% last quarter as the coronavirus shut down most of its business

Baby Yoda Lucasfilm

  • Disney's net income plunged 91% to $475 million last quarter as the coronavirus pandemic ravaged its business.
  • The entertainment titan closed theme parks and stores, halted cruises, and suffered from the lack of live sports, cinema and theater closures, and disruptions to its supply chain.
  • The virus outbreak slashed operating income by about $1 billion in Disney's parks, experiences, and products division, wiping about $1.4 billion off the company's total operating income.
  • However, Disney Plus has grown to 54.5 million since subscribers since launching last November, and helped drive a 260% revenue increase in Disney's direct-to-consumer and international division in Q2.
  • Visit Business Insider's homepage for more stories.

Disney's net income plummeted 91% to $475 million in the three months to March 28, as the coronavirus pandemic tore through the entertainment titan's operations.

The virus wiped out an estimated $1 billion in operating profits in Disney's parks, experiences, and products division, CEO Bob Chapek said on the second-quarter earnings call on Tuesday. It erased as much as $1.4 billion in total operating income, he added.

The financial fallout stemmed from Disney's closure of its Walt Disney World and Disneyland theme parks as well as Disney Stores, the suspension of its cruises, and supply chain disruptions.

Disney also suffered declines in ESPN viewer numbers and television advertising revenues after live sports events were postponed due to the virus. Moreover, its studio business stomached lower sales and higher bad-debt expenses as cinemas closed and Broadway and West End theaters shut.

Read more: These 22 well-known companies are vulnerable to acquisitions by private-equity buyers due to the coronavirus, BTIG says

The bright spot was Disney Plus, which launched in November. The video-streaming service grew its subscriber count by 26% to 33.5 million subscribers last quarter, driving revenues up 260% in Disney's direct-to-consumer and international division.

Disney Plus has added another 21 million subscribers since then, meaning it boasted 54.5 million as of May 4. Lockdowns have boosted demand for shows such as "The Mandalorian" and other Disney, Pixar, Lucasfilm, and Marvel movies and TV series.

Here's a chart showing the coronavirus' impact on Disney's park profits, which generated more than 35% of its total operating income last financial year:

Disney park income vs operating income

Read more: When Wade Pfau isn't writing books or winning awards, he's teaching Ph.D. students the art of retirement income. Here are 4 ways he says investors can reduce risk and thrive financially in the long term.

Join the conversation about this story »

NOW WATCH: We tested a machine that brews beer at the push of a button



* This article was originally published herePress Release Distribution

No comments