The Walt Disney Company reported doomsday financial results on Tuesday, with padlocked theme parks, idled cruise ships, postponed film releases, darkened Broadway marquees, closed mall stores and the absence of live sports on ESPN as a result of the coronavirus pandemic all contributing to $4.72 billion in quarterly losses.
But Disney’s newest and, as far as many investors are concerned, most important business — streaming — experienced growth as people quarantined at home. Disney said it had more than 100 million subscribers worldwide across its Disney+, Hulu and ESPN+ streaming services. Disney+ has about 58 million by itself, an astounding number for a platform that is less than nine months old.
Crossing the 100 million threshold was “a significant milestone and a reaffirmation of our direct-to-consumer strategy, which we view as key to the future growth of our company,” Bob Chapek, Disney’s chief executive officer, said in a statement.
In total, revenue in the quarter that ended on June 27 added up to $11.78 billion, falling from $20.26 billion and underscoring the extreme difficulties that the world’s largest entertainment company has faced during the coronavirus pandemic. During the quarter, Disney furloughed an estimated 100,000 employees, slashed executive pay by up to 50 percent and took out a $5 billion line of credit to bolster its liquidity, on top of $8.25 billion secured in March.
Per-share losses in the quarter, the third in Disney’s fiscal year, totaled $2.61 — a stark departure from the spectacular growth the company delivered from 2006, when it bought Pixar, to last year, when it swallowed the majority of Rupert Murdoch’s entertainment empire. In the same period last year, Disney had a profit of 79 cents per share.
Excluding one-time items, Disney squeaked out per share profit for the most recent quarter of eight cents, better than analysts were expecting.
Disney’s share price has been remarkably buoyant, however, because investors have focused on comeback efforts — the return of some sporting events and a retrofitted Walt Disney World that reopened to a limited number of visitors in mid-July — and the success of Disney’s streaming division. Hulu has been on a roll because of new programming, including the FX-supplied series “Mrs. America,” which received eight Emmy nominations. Disney+ created a cultural thunderclap in early July, when it released a live capture of the original “Hamilton” stage production.