Due to the ongoing global health crisis, The Walt Disney Company has had to pivot and adapt on the fly to the ever-changing circumstances of our new environment.
Consisting of many segments pertaining to the entertainment industry including Disney Cruise Line and Walt Disney Studios namely, just about every facet of The Walt Disney Company has been financially impacted from the shutdown, with Disney’s theme parks taking the biggest hit. Now, the Walt Disney Company has just held its Q3 earnings call to discuss the results of its third fiscal quarter of 2020.
On the Q2 earnings call which took place on May 5th, Disney announced Shanghai Disneyland’s reopening date (the first of its six parks to reopen), while CEO Bob Chapek and CFO Christine McCarthy estimated Disney’s loss operating income was equal to almost $1 billion — mostly due to closures.
Keep in mind the second quarter only constituted the first two weeks of the U.S. theme parks being closed. Disney World’s closure lasted for almost 17 weeks while Disneyland remains closed to this day.
In the third-quarter earnings report, Disney reported a 42% drop in revenues from the third quarter of 2019 from above $20 billion down to $11.7 billion. The operating income for all segments saw a 72% drop from almost $4 billion down to a little over $1 billion.
In the Segment Results section of the document, Disney reported incomes for each segment and the change that was seen from last year. As it turns out, the closure of Disney’s theme parks resulted in an almost $2 billion loss to the bottom line from the Parks, Experiences, and Products segment.
The Parks, Experiences, and Products segment wasn’t the only one to see a significant drop from last year. Studio Entertainment saw operating income drop 16% from 2019 to 2020.
Disney did see significant growth compared to 2019’s third quarter in the Media Networks segment. Operating income grew from about $2 billion to about $3 billion, an increase of 48%. The company did see a loss in the Direct-to-Consumer & International sector, although this is associated with the ongoing (and highly successful) launch of Disney+ and is offset by successes in Media Networks.
There’s still a long road ahead of The Walt Disney Company. Even though many of its theme parks have reopened recently except for Disneyland Resort which is still an unknown. Meanwhile, Hong Kong Disneyland which had previously reopened on June 18th has already closed down once more due to an uptick in COVID-19 cases.
Stay tuned for more specific updates from the Q3 Earnings Report on Disney Food Blog.
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