The Walt Disney Company reported total revenue of $14.7 billion for the period ended October 3, 2020, the company’s fourth fiscal quarter of 2020. This represents a 23% decrease compared to Q4 FY2019. Net loss from continuing operations was $710 million, compared to net income of $777 million for the same period last year. Diluted earnings per share were ($0.39), compared to $0.43 in Q4 FY2019. The company attributes the losses to the ongoing impacts from the coronavirus pandemic.
“As we close out the fourth quarter and reflect back on the year, I think we’d all agree it’s been a year unlike any other in our lifetimes, and certainly in the history of The Walt Disney Company. Despite the many challenges and hardships, I’m proud to say we have been steadfast in effectively managing our businesses under enormously difficult circumstances,” Chapek said.
“We haven’t just persevered during these tough times. We’ve also taken a number of deliberate steps and smart risks that have positioned our Company for greater long-term growth. And the impressive resilience Disney has demonstrated, while looking past today’s challenges to set the stage for an even brighter future is direct reflection of our outstanding team. They’ve done and continue to do an admirable job, balancing the needs of our cast, our shareholders and our guests,” added Chapek.
The “Disney difference”
Despite the decline in revenue and net loss for the quarter, Disney had one big bright spot – Disney+ which launched one year ago this month. Since inception, the direct-to-consumer streaming video subscription service is now available in over 20 countries and is soon to launch in Brazil, Mexico, Chile and Argentina. The service now has 73.7 million paid subscribers, an increase of more than 16 million subscribers in the third quarter, despite dropping free trials in June.
“The growth of Disney+ speaks volumes about the strength of our IP, our unparalleled brands and franchises and our amazing content creators, all part of the Disney difference that sets us apart from everyone else,” said Chapek.
Including Hulu + Live TV and ESPN+, Disney’s direct-to-consumer streaming video subscription services have more than 120 million paid subscribers globally. As a result of the success of the company’s streaming division, Disney has undergone a strategic reorganization to focus on streaming. Chapek noted that the company was able to continue animation production remotely at the start of the pandemic, and they are working on restarting or completing production of other projects. A key highlight is the launch of the second season of The Mandalorian, a fan favorite. Another program subscribers can look forward to is the debut of Pixar’s Soul on Christmas Day.
Parks segment continues to struggle
At the onset of the pandemic, Disney parks around the world were shut down. Some have been able to reopen with new health and safety protocols, while others have opened and shut down again. For example, Disneyland Paris had reopened but President Macron has since ordered another shutdown until COVID is under control again in Europe. Not surprisingly, the Parks, Experiences and Products segment of Disney’s business was significantly impacted, sustaining an operating loss of $1.1 billion.
Disney looks to the future
“As you can see, even during these most uncertain times, here’s The Walt Disney Company. We are finding ways to not only operate our businesses effectively, but also take the necessary bold steps for our future growth. And we are more committed than ever to investing in our businesses in particular our DTC strategy, which we see as the key driver of significant long-term value for our company,” concluded Chapek.
Disney’s results for the quarter were not surprising, though it is sad to see that Disney posted its first net loss in decades. Significant losses in the Parks segment were expected, but they were partially offset by the success of the direct-to-consumer streaming video subscription services. Disney+ is by far the most successful, especially just one year in, but ESN+ and Hulu + Live are holding their own. Disney promises to reveal more information about what to expect in the coming year during its virtual Investor Day on December 10.