Disney takes a US$1.4 billion earnings hit from coronavirus, with worse to come as cinemas and theme parks remain shut
- The coronavirus pandemic cost as much as US$1.4 billion in lost profit last quarter, Walt Disney said, with US$1 billion coming from closed theme parks
- Recovery could take two years or more, accordingt o a note by MoffettNathanson
Walt Disney investors got a taste of just how bad the coronavirus pandemic will be for the world’s largest entertainment company.
The crisis cost Disney as much as US$1.4 billion in lost profit last quarter, the company said Tuesday, with US$1 billion coming from closed theme parks alone, and nearly every part of its business taking a hit.
Earnings plunged by more than half to 60 cents a share in Disney’s second quarter, excluding some items. That trailed the 86-cent average of analysts’ estimates. Revenue rose 21 per cent to US$18 billion, but that was driven by the acquisition of 21st Century Fox’s entertainment assets last year.
It’s only going to get worse. Disney has already lost more than a full month of parks business and cruises in the current quarter, along with the shutdown of movie theatres and the loss of live sports on its flagship ESPN cable networks. Analysts predict the company will lose hundreds of millions of dollars this period, with revenue in free fall.
“This quarter is kind of a black hole,” said Dave Heger, an analyst with Edward Jones in St. Louis who expects the parks to remain shut for “most if not all” of the quarter. “They’re just in the mode of getting through the quarter, and by September, they can ramp back up. It’s anybody’s guess right now how quickly that can occur.”