Disney profit tumbles by $1.4 bln

Disney reported a $1.4-billion decline in profits for the first quarter mostly on the back of shut down theme parks.

Munsif Vengattil and Lisa Richwine reported the news for Reuters:

Walt Disney Co (DIS.N) estimated on Tuesday that global measures to contain the coronavirus pandemic cut profits by $1.4 billion, mostly from its shuttered theme parks, but said it would reopen Shanghai Disneyland to a reduced number of visitors next week.

It is unclear when Disney’s other parks in Asia, the United States and France would again welcome visitors, executives said, or when the company’s range of idled businesses including retail stores and cruise ships would return.

Disney said it will not pay a dividend for the first half of the fiscal year, which will preserve $1.6 billion in cash assuming it had kept the dividend constant at 88 cents per share.

Bob Chapek, who became Disney’s chief executive in February just as the novel coronavirus was spreading around the globe, said Disney would reopen the Shanghai park on May 11.

The BBC reported:

Disney chairman Bob Iger said the firm was facing “unprecedented” challenges but he was confident of recovery.

The firm is already planning to open its Shanghai park on 11 May.

Chief executive Bob Chapek said the company would take a “phased approach”, requiring advance reservations to limit attendance.

It said it would require health measures, such as masks and temperature checks.

“We are seeing encouraging signs of gradual return to some semblance of normalcy in China,” he said.

“While it’s too early to predict when we’ll be able to begin resuming all of our operations, we are evaluating a number of different scenarios to ensure a cautious, sensible and deliberate approach to the eventual reopening of our parks.”

CNN’s Frank Pallotta wrote:

While Disney’s results illustrate how badly the coronavirus has hobbled its business, there was one bright spot for the company: Disney+.

In just five months, the company’s streaming service, which debuted in November, racked up roughly 54 million paid subscribers globally, the company said on Tuesday. That puts it within striking range of Disney’s long-term subscriber projections.

The company said that revenues for its direct-to-consumer business, which includes Disney+, Hulu and ESPN+, increased from $1.1 billion last year to $4.1 billion.

However, its growth comes at a big cost for Disney.

The company said that the operating income for its streaming unit fell $812 million in the second quarter.