BREAKING: Parks, Experiences and Products Loses $2 Billion in Third Quarter, The Walt Disney Company Reports Historic Losses in Revenue Due to COVID-19 Pandemic
The much-anticipated Q3 FY20 earnings report for The Walt Disney Company was remarkable, as the public was finally able to see the financial hit Disney has taken due to COVID-19 and the subsequent entertainment industry shutdown.
We had some insight on how bad this quarter could be for Disney when Universal reported a 94% loss in revenue last week, and that’s taking into account that Universal Orlando Resort reopened weeks before Walt Disney World Resort did.
The Walt Disney Company announced its earnings for the third quarter of the fiscal year 2020 today. EPS (earnings per share) beat wall street estimates by $0.75 a share but revenue missed estimates by $580 million. Revenue for Disney in the quarter ending June 2020 was $11.78 billion, 41.8% lower versus the third quarter in 2019.
As a result of COVID-19, domestic parks and resorts, cruise line business and Disneyland Paris were closed for all of the current quarter. Asia parks and resorts were closed for a portion of the current quarter, as Shanghai Disney Resort re-opened in May and Hong Kong Disneyland Resort reopened in late June (Hong Kong Disneyland Resort closed again in July).
Disney+ subscribers increased to 57.75 million, up from 33.5 million in the second quarter of FY20, as of this article. ESPN+ subscribers increased to 8.5 million up from 7.9 million in the second quarter of FY20.
Disney’s third quarter runs from April through June, which of course means the impact of the opening of Walt Disney World will not be reflected in this report. However, Disney Springs reopened in mid-May and several Disney Vacation Club Resorts did open in June, which represents a small impact to revenue due to guest spend on dining and experiences.
Parks, Experiences and Products revenues for the quarter decreased 85% to $1.0 billion, and segment operating results decreased $3.7 billion to a loss of $2.0 billion. Lower operating results for the quarter were due to decreases at both the domestic and international parks and experiences businesses and to a lesser extent, at our merchandise licensing and retail businesses.
In total, Disney estimates the net adverse impact of COVID-19 on the current quarter segment operating income across all businesses was approximately $2.9 billion, inclusive of the impact at Parks, Experiences and Products. Disney’s stock is up 16% since Q2 FY20.
Disney’s stock was trading up 2.3% in after-markets after the earnings were released. You can review the full Q3 2020 Earnings Report by clicking here.