Economy

Disney posts loss as parks remain closed

Disney posts loss as parks remain closed”

During the Thursday report, CEO Bob Chapek recognized that "It's been a year unlike any other in our lifetimes, and certainly in the history of the Walt Disney Co.", but also assured investors that all was not lost, as "the real bright spot has been our direct-to-consumer business, which is key to the future of our company".

Disney's direct-to-consumer division - including streaming service Disney+ which began offering U.S. broadway show Hamilton in July - has been a "bright spot" amid the pandemic, said Bob Chapek, chief executive.

Disney plans to forego its semiannual dividend as it copes with the crisis.

Disney World as well as the open parks in Shanghai and Hong Kong each generated enough revenue for the quarter to cover their costs, Disney's chief financial officer Christine McCarthy said. Once a growth engine, Disney's parks have become a drag: Properties in California remain closed and visitors to other resorts remain light, due to both virus-related restrictions and consumers' unwillingness to travel.

Behind the scenes, Disney has reorganized its corporate structure to make streaming an even bigger priority than it was before the pandemic closed movie theaters.

Analyst Eric Haggstrom of eMarketer said that the streaming service showed impressive results for Disney.

Overall, Disney managed to exceed revenue expectations of US$14.2 billion to make US$14.7 billion for the quarter, but Q4 was down by nearly 25% from US$19.1 billion in Q4 2019. Chapek did warn that the unpredictability of COVID-19 could cause disruptions.

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Disney+ and Disney+ Hotstar added over 16 million subscribers this past quarter - that's July through September - with the latter helping the most, thanks to the recently-concluded 2020 IPL season. Disney's revenue fell to $14.7 billion (compared to $19.1 billion during Q4 2019), with a loss of $0.39 per share.

He acknowledges that people are willing to visit the parks because they trust Disney and are confident in the measures that have been taken.

He continues on to say that the company is extremely disappointed in the state of California for keeping Disneyland closed.

Despite this, the company continues to suffer the impact of the Covid-19 pandemic which has ravaged its studios and parks businesses.

Disney was forced to shut its theme parks when the pandemic hit, and lay off 28,000 staff in the division after tens of thousands were on furlough for six months.

Chapek said the company has proven they're able to operate parks responsibly following strictly enforced guidelines provided by healthcare experts which he says has only boosted fans' love of the brand.



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