Disney’s profit plunged 91% last quarter as coronavirus lockdown

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Disney’s profit plummeted 91% to $475 million in the three months to March 28, as the coronavirus pandemic tore through the entertainment titan’s operations.

The virus wiped out an estimated $1 billion in operating profits in Disney’s parks, experiences, and products division, CEO Bob Chapek said on the second-quarter earnings call on Tuesday. It erased as much as $1.4 billion in total operating income, he added.

The financial fallout stemmed from Disney’s closure of its Walt Disney World and Disneyland theme parks as well as Disney Stores, the suspension of its cruises, and supply chain disruptions.

Disney’s profit also suffered declines in ESPN viewer numbers and television advertising revenues after live sports events were postponed due to the virus. Moreover, its studio business stomached lower sales and higher bad-debt expenses as cinemas closed and Broadway and West End theaters shut.

The bright spot was Disney Plus, which launched in November. The video-streaming service grew its subscriber count by 26% to 33.5 million subscribers last quarter, driving revenues up 260% in Disney’s direct-to-consumer and international division.

Disney Plus has added another 21 million subscribers since then, meaning it boasted 54.5 million as of May 4. Lockdowns have boosted demand for shows such as “The Mandalorian” and other Disney, Pixar, Lucasfilm, and Marvel movies and TV series.

Here’s a chart showing the coronavirus’ impact on Disney’s park profits, which generated more than 35% of its total operating income last financial year:

Disney park income vs operating income

Source: markets.businessinsider.com

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