Disney Reports Surprising Q3 Profit
The Disney business has been hit hard by the coronavirus pandemic. Needless to say, the most significant impact was seen on the Parks, Experiences and Products segment, as Disney parks and resorts have been closed, and cruise sailings were suspended.
Parks, experiences and products revenues for the quarter have fallen 85%, studio entertainment revenues - 55%, and direct-to-consumer and international revenues - 2%. The total estimated loss, according to Disney, had amounted to an overwhelming $2.9 billion.
Luckily, a surprise third-quarter profit, achieved by cost cuts and the success of the Disney streaming service (which has racked up a total of 57.5 million users in this quarter) helped pull Disney up and offset the effects of the losses. Disney announced earnings per share of 8 cents on revenue of $11.78 billion, while analysts anticipated LPS of 61 cents on revenue of $12.44 billion.
"It’s obvious from this report that financial hemorrhage is continuing as Disney’s parks and other entertainment assets are unable to operate when the pandemic is spreading. In this, otherwise, quite gloomy earnings outlook, Disney’s explosive growth in its streaming business is the only silver lining which is grabbing investors’ attention. The company is taking full advantage of the stay-at-home environment and adding subscribers at a robust pace," Investing.com analyst Haris Anwar comments.
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