Coronavirus sends Disney to rare quarterly loss

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Walt Disney Co on Tuesday reported financial results that fell short of 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 globally.

Disney’s quarterly net profit of 8 US cents per share beat expectations of a 64 US cents per share loss on an adjusted basis, sending shares up 5 per cent in after-market trade on the New York Stock Exchange.

COVID-19 wiped out US$3.5-billion in operating profit in the parks division.

Investors overlooked total revenue that fell short of expectations by nearly US$600-million and focused on divisions including parks and its media networks whose declines in revenue were not as bad as expected.

The Disney+ streaming service, which now reaches 60.5 million customers as of Monday, has also been a bright spot in the quarter, Bob Chapek, Disney chief executive, told analysts on Tuesday.

The outbreak forced the company to close some of its parks globally and delay the release of films, including the much-anticipated Mulan.

In a surprise move, Disney said it will release Mulan directly to consumers on Disney+ for US$30.

Closing of theme parks in the quarter resulted in an operating loss of US$1.96-billion in parks and consumer products business. Even as four of its six theme park resorts around the world have opened, social distancing rules have weighed on visitors allowed.

The media network segment, which includes ESPN and Disney channels, reported a 48 per cent jump in operating income to US$3.15-billion.

The direct-to-consumer and international segment, which houses its streaming service, Disney+, reported an operating loss of US$706-million, compared with an operating loss of US$562-million in the year-ago quarter.

Operating income in the movie studio segment, which includes Marvel, Pixar, Lucasfilm and Fox, fell 16 per cent to US$668-million, in a quarter marked by movie theatre closings.

Overall revenue fell 42 per cent to US$11.78-billion. Analysts on average had expected revenue of US$12.37-billion, according to Refinitiv IBES data.

Net loss from continuing operations was US$4.72-billion, or US$2.61 per share, in the third quarter ended June 27, compared with a net profit of US$1.43-billion, or 79 US cents per share, a year earlier.

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