Walt Disney Co., (NYSE:DIS) the world’s largest entertainment company, has been hard hit by the coronavirus pandemic.
Disney reported $1.4 billion U.S. in lost profit in the last quarter, with $1 billion U.S. coming from shuttered theme parks and nearly every part of its business taking a hit. Worse, Disney warned that the worst for the company is yet to come.
Earnings plunged by more than half to 60 cents a share in Disney’s second quarter. That trailed the 86-cent average of analysts’ estimates. Revenue rose 21% to $18 billion U.S., but that was driven by the acquisition of 21st Century Fox’s entertainment assets last year.
Disney also reported that it has lost more than a full month of theme park business and cruises in the current quarter, along with the shutdown of movie theaters and the loss of live sports on its flagship ESPN cable network. Analysts predict the company will lose hundreds of millions of dollars this period.
Disney has taken a variety of steps to cut costs, including reductions in executive pay and furloughs for many workers. The company said it will forgo its July dividend payment, saving about $1.6 billion U.S., and cut capital spending by $900 million U.S. Losses in the quarter were mitigated somewhat by a $150-million U.S. employee tax credit that was part of the federal coronavirus relief legislation.
Disney did offer some near-term hope for the theme-park business, saying its resort in Shanghai will reopen on May 11. Also on the positive side were results for Disney+, a streaming service launched last November that has been a bright spot. It now has more than 54 million subscribers, far more than originally forecast.
Some analysts forecast that it could take two years or longer for Disney to rebound from the global pandemic lockdown.
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