Today the Walt Disney Company reported $18.01 billion in revenue and earnings of 60 cents per share for its fiscal second quarter of 2020, missing analysts’ profit estimates. In its first report since the coronavirus pandemic upended much of the world, Disney narrowly brought in more revenue than expected, per estimates published by CNBC, but make no mistake: The many-tentacled media empire is exposed just about everywhere.
As analyst firm MoffettNathanson made searingly clear when it downgraded Disney’s stock on Monday, Disney investors have little to look forward to at the moment, aside from its streaming efforts, which include Disney Plus. Disney’s bread-and-butter dealings—its media networks and live sports, movies, theme parks and hotels, merchandise, and so on—are all threatened directly by the coronavirus pandemic (some more than others). That’s why the firm argued Disney’s “risk-reward is just not that compelling,” even into 2022.
Disney’s new CEO, Bob Chapek, put it differently: “While the COVID-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position,” he said in an earnings release today, pointing to “the extraordinary response to Disney+” as a bright spot.
Disney estimates it’s so far lost out on “as much as $1.4 billion” across its businesses due to the coronavirus.
The effects of the pandemic on Disney’s bottom line may not be clear until August, when the company is expected to report its third-quarter earnings. “The COVID-19 pandemic transformed some of Disney’s greatest strengths into its greatest vulnerabilities,” wrote eMarketer analyst Ross Benes. “Theatrical releases and theme parks, long-time profit centers for the company, are losing money in the short-term and have no clear path to recovery until improved treatments or vaccines make consumers comfortable to venture back out into large crowds.”
Here are the key numbers for Q2 2020:
- Revenue: $18.01 billion ($17.80 billion expected)
- Earnings: $0.60 per share ($0.89 expected)
- COVID-19 estimated revenue loss: $1 billion for Disney’s Parks, Experiences and Products segment, “as much as $1.4 billion” in total.
- Disney Plus subscribers: 54 million
Disney’s stock price closed down by about 2% today. In after-hours trading it slipped again, by 1.5%.