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Disney first quarter revenue down 22 percent from last year due to pandemic

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The Walt Disney Company on Thursday reported a revenue of 16.24 billion U.S. dollars for its fiscal first quarter of 2021, down 22 percent year over year.

Diluted earnings per share (EPS) from continuing operations for the quarter decreased 98 percent to 0.02 dollars from 1.17 dollars in the prior-year quarter. Excluding certain items affecting comparability, diluted EPS for the quarter decreased 79 percent to 0.32 dollars from 1.53 dollars in the prior-year quarter, according to a Disney press release.

The U.S. entertainment giant noted that results in the quarter ended Jan. 2, 2021 were adversely impacted by the novel coronavirus.

“Since late in the second quarter of fiscal 2020 and continuing into fiscal 2021, COVID-19 and measures to prevent its spread have impacted our segments in a number of ways, most significantly at Disney Parks, Experiences and Products,” Disney said in the release.

The company estimated that pandemic-related costs may total approximately one billion dollars in fiscal 2021.

Disney said COVID-19 cost its parks, experiences and products segment an estimated 2.6 billion dollars in operating income in the most recent quarter, while segment revenues decreased by 53 percent to 3.6 billion dollars, and segment operating results decreased 2.6 billion dollars to a loss of 119 million dollars.

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“As a result of COVID-19, Disneyland Resort was closed and our cruise business was suspended in the current quarter. Disneyland Paris closed on Oct. 30, 2020 and Hong Kong Disneyland Resort closed on Dec. 2, 2020. Walt Disney World Resort and Shanghai Disney Resort were open in the current quarter,” the company stated, adding that its parks and resorts that were open during the quarter operated at significantly reduced capacities.

Disney cruise ship sailings and guided tours were also suspended in the quarter. The company has also delayed, or in some cases, shortened or canceled, theatrical releases and suspended stage play performances.

Disney explained that theatrical distribution was lower as there were no significant worldwide theatrical releases in the current quarter compared to “Frozen II,” which was released in the prior-year quarter. The company lamented that the quarter was negatively impacted by COVID-19 as many theaters globally were either closed or operating at reduced capacity.

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The good news for Disney was Disney+. Its ambitious direct-to-consumer (DTC) streaming service launched in 2019 continued to grow amid the pandemic.

Disney+ has 94.9 million paid subscribers as of early January, up more than 8 million in just one month.

According to Disney, DTC revenues for the quarter increased 73 percent to 3.5 billion dollars and operating loss decreased from 1.1 billion to 466 million dollars. The decrease in operating loss was due to improved results at Hulu, and to a lesser extent, at Disney+ and ESPN+.

Disney said the improvement at Disney+ was driven by an increase in subscribers, partially offset by higher programming and production cost amortization and increased marketing and technology costs.

“The increases in subscribers and costs reflected the ongoing expansion of Disney+ including launching in additional markets. The current quarter included three months of Disney+ operations whereas the prior-year quarter included two months,” Disney noted.

“We believe 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 business, reaching more than 146 million total paid subscriptions across our streaming services at the end of the quarter,” said Bob Chapek, chief executive officer of Walt Disney.

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“We’re confident that, with our robust pipeline of exceptional, high-quality content and the upcoming launch of our new Star-branded international general entertainment offering, we are well-positioned to achieve even greater success going forward,” he added. Enditem

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