The U.S. entertainment giant The Walt Disney Company (DIS) came announcing its first ever loss in 40 years on Thursday getting a hit by the pandemic impact, facing -1.67 percent loss to close at $135.52 on the day.
Company suffered loss as its theme parks remained emptied, cruise subsidiary remained blocked, and film production disrupted all because of the coronavirus outbreak. The company reported a net loss of $2.83 billion for the full 2019-2020 fiscal year, its first loss since 1980.
However, due in part to cost controls and the popularity of the Disney+ streaming video service, which has added 73.7 million users only one year after its launch and has gained from the Covid-19 pandemic’s lockdowns, the figures came out less weak than analysts had feared.
Walt Disney shares on Wall Street jumped 3.34 percent in after hours trading after Wall Street closed. Since the beginning of the year the stock has lost 6.74 per cent.
Disney incurred a net loss of $710 million (39 cents per share) in fiscal quarter 4 alone the second straight quarter of reported losses. The net loss per share was 20 cents after adjustments, including restructuring costs, compared to a profit of $1.07 in the fourth quarter of 2018-2019. Company’s sales dropped 23 percent from $19.1 billion a year ago, to $14.71 billion.
These figures, however, surpassed the consensus estimate by FactSet, which expected an adjusted loss of 71 cents and $14.15 billion in revenue.
“In our lives and in the history of the Walt Disney Corporation, this year has not looked like any other,” Disney Chief Executive Officer Bob Chapek said on a conference call. “The real positive is our direct-to-consumer market,” he stressed, including streaming video (Disney+), adding that this industry will be the key to the company’s future.
The executive indicated that the Disney+ had 73.7 million paying subscribers at the end of September, well above the group’s forecasts, exactly one year after the launch of the service. An additional 16.2 million subscribers were added in the fourth quarter, an increase of 28 percent from the end of the third quarter (57.5 million).
The pandemic lowered the operating income of The Walt Disney Company (DIS) by $7.4 billion for the year, much of which ($6.9 billion) was in the company’s theme parks and other experiences segments. In September, in order to cope with the crisis, the company announced the elimination of no less than 28,000 jobs, most of them in this business.