Disney Takes a Beating From Coronavirus, Q2 Earnings Sink 60%

Disney saw its second quarter earnings hampered by the effects of the coronavirus pandemic.

While Disney’s revenue was enough to both top Wall Street estimates and improve over the year-ago quarter, its earnings-per-share plummeted 63% to 60 cents, coming in below Wall Street’s already-reduced estimates of 88 cents EPS. Disney earned just north of $18 billion in revenue, which analysts had projected to be $17.8 billion.

“While the COVID-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position,” said Bob Chapek, Chief Executive Officer, The Walt Disney Company. “Disney has repeatedly shown that it is exceptionally resilient, bolstered by the quality of our storytelling and the strong affinity consumers have for our brands, which is evident in the extraordinary response to Disney+ since its launch last November.”

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The company was particularly hit hard by the closures of its theme parks, which shuttered in the U.S. in March and were closed in Asia in January. The parks, experiences and products division is Disney’s biggest revenue driver. The parks in Shanghai and Hong Kong have since reopened some restaurants and retail stores.

For the quarter, parks, experiences and products revenues decreased 10% to $5.5 billion, and segment operating income decreased 58% to $639 million. Disney estimates the total impact of COVID-19 on segment operating income in the quarter was approximately $1 billion. For its entire business, Disney said the global health crisis cost it around $1.4 billion, as the studio was forced to delay the release of popular films like “Mulan.” Next quarter won’t look any brighter with the push back of Marvel’s “Black Widow,” which was supposed to hit theaters last weekend, but is currently scheduled for November.

Disney also said it more than 33 million subscribers for Disney+ at the end of the quarter, up from the 26.5 million it reported the prior quarter, on March 28. During the earnings call, the company said it reached 54.5 million subscribers as of May 4, which puts Disney on track to reach its 2024 subscriber goal in the next quarter.

Hulu rose to 32.1 million subscribers in the quarter, which includes 3.3 million to its Live TV offering, while ESPN+ also increased its sub count to 7.9 million.

Also Read: Disney to Reopen Shanghai Disneyland May 11 With Social Distancing

Revenues for the entire direct-to-consumer business increased from $1.1 billion to $4.1 billion, but segment operating loss also increased from $385 million to $812 million.

Revenues at Disney’s other segments increased, partially due to the fact that most of the coronavirus-led shutdowns happened near the end of the quarter. Media Networks revenues for the quarter increased 28% to $7.3 billion, and segment operating income increased 7% to $2.4 billion. That came despite a decline in ad revenue for ESPN, which lost most of its programming in the middle of March as sports were benched.

Within the studio group, operating income dropped 8% as movies like Pixar’s “Onward” were released just before theaters closed.

During its earnings call, Disney said it is canceling its summer dividend, which should save the company $1.6 billion.

All the Hollywood Films Arriving on Demand Early Because of the Coronavirus

Since most U.S. movie theaters have shuttered in response to the coronavirus pandemic, studios are rushing out VOD home releases of movies that were only just in theaters.
Disney/Warner Bros./Universal
"Trolls World Tour"

The sequel to the 2017 animated hit announced it would be available for digital download on April 10 -- the same day it was supposed to land in theaters. Now it's a VOD exclusive.
Universal Pictures
"Birds of Prey"

The Margot Robbie spinoff of 2017's "Suicide Squad" debuted on demand on March 24. The film grossed $84 million since opening on Feb. 4.
Warner Bros.
"The Hunt"

The Universal/Blumhouse horror film was first delayed from release last fall due to controversy over its violent content -- and then sidelined after its March 13 opening by the coronavirus. It's available to stream now.
Universal Pictures
"The Invisible Man"

The Universal horror film starring Elisabeth Moss grossed nearly $65 million since its Feb. 26 release in theaters. It's available to stream now.
Universal Pictures
"Emma."

Focus Features' adaptation of the Jane Austen novel opened in limited release Feb. 21 -- and picked up $10 million in ticket sales until the pandemic shut down theaters. It's available to stream now.
Focus Features
"Bloodshot"

The Vin Diesel comic-book movie opened March 6 and grossed $10 million before theaters shut down. It's available on VOD now.
Sony Pictures
"I Still Believe"

Lionsgate's biopic starring K.J. Apa as Christian music star Jeremy Camp hit VOD on March 27 -- just two weeks after it opened in theaters.
Lionsgate
"The Way Back"

Warner Bros. released the Ben Affleck drama "The Way Back" -- which grossed $13 million in theaters since its March 6 opening -- on VOD less than three weeks later, on March 24.
Warner Bros.
"Onward"

Disney and Pixar’s animated feature was made available for purchase on Friday, March 20, and the film hit Disney+ on April 3.
Disney/Pixar
"Sonic the Hedgehog"

Paramount Pictures' "Sonic the Hedgehog" set a new record for video game adaptations with a $58 million domestic opening weekend on Feb. 14 and has grossed $306 million worldwide theatrically. It's available on demand now.
Paramount Pictures
"The Call of the Wild"

20th Century Studios' feel-good film starring Harrison Ford and a giant CGI dog is available on demand now.
20th Century
"Downhill"

Barely escaping an avalanche during a family ski vacation, a married couple (Julia Louis-Dreyfus and Will Ferrell) is thrown into disarray as they are forced to reevaluate their lives and how they feel about each other. It's available on demand now.
Fox Searchlight
"Never Rarely Sometimes Always"

"Never Rarely Sometimes Always" is the story of two teenage cousins from rural Pennsylvania who journey to New York City to seek an abortion. The film premiered at the Sundance Film Festival and walked away with a Special Jury award. It's available for VOD now.
Focus Features
"Endings, Beginnings"

"Endings, Beginnings," a romantic drama from Drake Doremus starring Shailene Woodley, Sebastian Stan and Jamie Dornan, opened early on digital on April 17 and on demand on May 1. It was meant to open theatrically on May 1.
Samuel Goldwyn Films
"To the Stars"

"To the Stars," a period drama set in 1960s Oklahoma that stars Kara Hayward, Liana Liberato, Jordana Spiro, Shea Whigham, Malin Akerman and Tony Hale, was bumped up to a digital release on April 24 and an on demand release on June 1. Martha Stephens directed the film that premiered at Sundance in 2019 and was meant to be released theatrically by Samuel Goldwyn Films.
Samuel Goldwyn Films
"Impractical Jokers: The Movie"

truTV's first-ever feature-length film arrived early on digital on April 1. Follow James "Murr" Murray, Brian "Q" Quinn, Joe Gatto, and Sal Vulvano, aka The Tenderloins, playing themselves in a fictional story of a humiliating high school mishap from the early '90s.
truTV
"Artemis Fowl"

Disney's adaptation of the Eoin Colfer fantasy novel "Artemis Fowl" was meant to debut in theaters on May 29 but premiered exclusively on Disney+. The film is directed by Kenneth Branagh and stars Colin Farrell and Judi Dench.
Disney
"The Infiltrators"

The theatrical release of Oscilloscope's docu-thriller "The Infiltrators" has been postponed, and the film was released on both Cable On Demand and Digital Platforms starting June 2.
Oscilloscope
"Working Man"

The March 27 theatrical release of "Working Man" has been canceled due to the theater closures, and the film premiered on May 5 via Video On Demand.
Brainstorm Media
"Jump Shot: The Kenny Sailors Story"

"Jump Shot: The Kenny Sailors Story," a sports documentary executive produced by NBA star Steph Curry, was made available for streaming on the new service Altavod between April 16-18 for $7.99 and is available for pre-order beginning April 9. 10% of all the proceeds will be donated to COVID-19 relief efforts. The documentary tells the story of the player, Kenny Sailors, who pioneered the jump shot, and it features interviews with Curry, Kevin Durant, Dirk Nowitzki, Clark Kellogg, Bobby Knight and more.
Photo by Rob Carr/Getty Images
"Scoob!"

Warner Bros. announced on April 11 that it would release the family animated film “Scoob!” for digital ownership and premium video on-demand on May 15, making it the second film (after Universal's "Trolls World Tour") to cancel a planned theatrical release and head straight to home release pandemic.
Warner Bros.
"The King of Staten Island"

"The King of Staten Island," the comedy starring and co-written by "SNL" star Pete Davidson and directed by Judd Apatow, skipped its theatrical release date of June 19 and opened one week early on VOD everywhere on June 12.
Universal Pictures
"The High Note"

"The High Note," the latest film from "Late Night" director Nisha Ganatra that stars Tracee Ellis Ross and Dakota Johnson, made its premiere on VOD on May 29. It was meant to open on May 8 theatrically.
Focus Features
"Waiting for the Barbarians"

Ciro Guerra's film starring Mark Rylance, Johnny Depp and Robert Pattinson was originally slated for a theatrical release but was picked up by Samuel Goldwyn Films to instead be released via cable on demand and on digital in August
Samuel Goldwyn Films
"Irresistible"

Jon Stewart's latest film, a political comedy called "Irresistible," will skip theaters and make its premiere online for on demand digital rental on June 26. The film from Focus Features stars Steve Carell and Rose Byrne and was meant to open in theaters on May 29.
Daniel McFadden / Focus Features
"My Spy"

The Dave Bautista action comedy "My Spy" was originally meant for a theatrical release from STXfilms and was due to hit theaters in March. Amazon then acquired the film from STX and will now release it on streaming on June 26.
Amazon Studios
"The One and Only Ivan"

The animated Disney film based on Thea Sharrock's best-selling children's book "The One and Only Ivan" is the latest feature to skip theaters and move to Disney+. The movie features the voice talent of Angelina Jolie, Danny Devito, Sam Rockwell, Bryan Cranston and Helen Mirren. The film was previously slated for theatrical release on August 14 but will now debut on Disney+ one week later on Aug. 21.
Disney
"The Secret Garden"

The re-imagining of the book "The Secret Garden" was meant to open in UK theaters in April but delayed its theatrical release until August. But STXfilms will now release the StudioCanal and Heyday Films movie on PVOD for $19.99 on August 7 in North America. "The Secret Garden" stars Colin Firth, Julie Walters and Dixie Egerickx.
STXfilms

1 of 29

”Irresistible“ joins a list of big films heading to digital home entertainment platforms early

Since most U.S. movie theaters have shuttered in response to the coronavirus pandemic, studios are rushing out VOD home releases of movies that were only just in theaters.

View In Gallery

All the Hollywood Films Arriving on Demand Early Because of the Coronavirus

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