The company took a nearly $5 billion charge due to the pandemic and shifting media habits. Covid-19 wiped out $3.5 billion in operating profit in the parks division
Walt Disney Co on Tuesday avoided the unmitigated disaster some investors feared as it eked out an adjusted profit amid the coronavirus pandemic that shut down parks, movie theaters and sporting events across the globe.
Disney's quarterly profit of 8 cents per share on an adjusted basis beat expectations for a loss of 64 cents, sending the stock up 5 per cent in after-market trade.
The company took a nearly $5 billion charge due to the pandemic and shifting media habits. Covid-19 wiped out $3.5 billion in operating profit in the parks division.
"The majority of businesses worldwide have experienced unprecedented disruption as a result of the pandemic," Disney Chief Executive Bob Chapek told analysts. "Most of our businesses were shut down, and this had a huge impact." Investors overlooked total revenue that fell short of expectations by nearly $600 million and focused on divisions including parks and its media networks with revenue declines that were not as bad as expected.
The Disney+ streaming service, which had 60.5 million paying customers as of Monday, was a bright spot in the quarter, Chapek said. Disney had reported 54.5 million subscribers as of May 4.
"What we plan to do is invest even more in our content in order to keep that machine cranked and going," he said.
Combined with Hulu and ESPN+, Disney has attracted more than 100 million streaming customers worldwide since launching its big streaming effort nine months ago. Netflix Inc, which got a head start in the market when it began streaming 13 years ago, boasts 193 million.
The coronavirus outbreak forced Disney to delay the theatrical debut of movies including the live-action epic "Mulan" about a Chinese warrior.
In a surprise move, Disney said it will release "Mulan" on Disney+ on Sept. 4 for people to watch at home at a cost of $30, and in theaters in markets where Disney+ is not available.