Disney profit plunges by more than half after theme parks close

Walt Disney Co.’s second-quarter profit plunged by more than half as the world’s largest entertainment company was bludgeoned on all sides by the COVID-19 pandemic. At 60 cents a share, excluding some items, earnings trailed the 86-cent average of analysts’ estimates. Revenue rose 21 percent to $18 billion, but that was driven by the acquisition of 21st Century Fox’s entertainment assets last year. Key insights • The worst performance by far came from the theme park division, where operating income tumbled to $639 million from $1.51 billion last year. Disney’s theme parks around the world remain shuttered due to the coronavirus, with the resorts in Asia closed since late January. • Profits at the film studio, which has been unable to show movies in theaters since mid-March, dropped 8 percent. Strong performances by films in theaters earlier in the quarter, such as “Frozen 2” and “Star Wars: The Rise of Skywalker,” failed to make up for write-offs the company took on other projects. • In the company’s TV business, operating income rose 7 percent as increased sales of TV shows and the Fox merger boosted results. But cable networks such as ESPN were hurt by an advertising slump in the wake of the coronavirus lockdown. ESPN is especially vulnerable in a world without live sports. • One bright spot, despite still being in the money-losing stage, was the direct-to-consumer division, which has seen strong growth in subscribers to its new Disney+ streaming service launched in November. The division’s losses, at $812 million, were less than the $900 million analysts were projecting. Market reaction Disney shares rose less than 1 percent in after-hours trading. They were down 30 percent this year through the close, suffering a far steeper fall than the S&P 500 Index. —Bloomberg News

Disney profit plunges by more than half after theme parks close

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