Disney – Slammed by Park Closures, Saved by Streaming – Reports $16.25 Billion in Revenue
Disney reported its earnings for its first fiscal quarter of 2021 and beat both earnings and revenue expectations, thanks to its streaming services, which helped drive growth amid park closures. The company reported EPS of $0.32 and revenue of $16.25 billion, according to the earnings statement.
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These numbers compare to the consensus EPS estimate, which was -$0.34 and the consensus revenue estimate of $15.88 billion, according to Seeking Alpha.
The company says in the earnings statement that results in the quarter were adversely impacted by COVID-19. “The most significant impact was at the Disney Parks, Experiences and Products segment where since late in the second quarter of fiscal 2020, our parks and resorts have been closed or operating at significantly reduced capacity and our cruise ship sailings have been suspended.”
Bob Chapek, Disney Chief Executive Officer, says in the statement that the company believes “the strategic actions we’re taking to transform our company will fuel our growth and enhance shareholder value, as demonstrated by the incredible strides we’ve made in our DTC [direct-to-consumer] business, reaching more than 146 million total paid subscriptions across our streaming services at the end of the quarter. We are well-positioned to achieve even greater success going forward.”
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The company also says it was impacted by the cancellation or shift of key live sports programming from fiscal 2020 into fiscal 2021, as well as the suspension of production of most film and television content.
“We have incurred, and will continue to incur, additional costs to address government regulations and implement safety measures for our employees, talent and guests,” according to the statement. Disney estimates these costs may total approximately $1 billion in fiscal 2021.
Per segment, the company’s DTC revenues for the quarter increased 73% to $3.5 billion and operating loss decreased from $1.1 billion to $466 million. The decrease in operating loss was due to improved results at Hulu due to subscriber growth, and to a lesser extent, at Disney+ and ESPN+.
For the Disney Parks, Experiences and Products segment (which includes its cruise business) revenues for the quarter decreased 53% to $3.6 billion, and segment operating results decreased $2.6 billion to a loss of $119 million.
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