Walt Disney Co. badly missed Wall Street estimates on earnings but barely beat them on revenue for the fiscal second quarter as the company got knocked around by the coronavirus outbreak.
The Burbank entertainment and media giant reported net income of $460 million (25 cents a share) for the quarter ending March 28, compared with net income of $5.5 billion ($3.55) in the same period a year earlier. Revenue increased 21 percent to $18 billion.
Analysts on average had anticipated earnings of 88 cents on revenue of $17.8 billion, according to Thomson Financial Network.
Chief Executive Bob Chapek said that while the COVID-18 pandemic that resulted in the company closing its theme parks, suspending all film and television production and laying off much of its workforce had “an appreciable financial impact” on its businesses, he was confident of the company’s ability to withstand the disruption and emerge from it in a strong position.
“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,” Chapek said in a statement.
Of Disney’s four business units, only theme parks had a decrease in revenue, going down by 10 percent to $5.5 billion. The company estimated its hit on operating income at $1 billion.
Despite the closure of U.S. movie theaters starting in mid-March, the studio entertainment division still had an 18 percent increase in revenue to $2.5 billion.
Direct-to-consumer and International business unit revenues increased by more than 100 percent to $4.1 billion from $1.1 billion, and operating income loss went up by more than 100 percent to $812 million from $385 million.
“The increase in operating loss was due to costs associated with the launch of Disney+ and the consolidation of Hulu,” the company said in a statement.
Shares of Disney closed Tuesday down $2.12, or just more than 2 percent, to $101.06 on the New York Stock Exchange on a day when the Dow finished up by half a percent and the Nasdaq went up 1.1 percent.