by SignalFactory · November 13, 2020 | 11:52:38 UTC
Disney said its streaming service, Disney+, now has more than 73 million paid subscribers as of the end of the fourth quarter.
Shares rose as much as 6% after hours but pared gains during the executives’ call with analysts when CFO Christine McCarthy said Disney would forgo its semi-annual dividend in January. She said the company would continue with dividends in the long term. The decision to pause the dividend came after activist investor Dan Loeb said the company ends the dividend to fund Disney+ content. Shares were still up more than 3% during the call.
The Covid-19 pandemic has most significantly impacted Disney’s parks division due to local restrictions that have forced temporary closures or limited capacity. Disneyland Resorts has remained closed as California restrictions prevent it from operating due to the level of Covid-19 cases in the surrounding county. It has been able to reopen its theme parks in Florida, Shanghai, Japan, and Hong Kong with limited capacity. However, Paris Disneyland was forced to close in late October and will not reopen until 2021. Disney estimated that the net adverse impact of Covid-19 on the parks division operating income was about $2.4 billion in the fourth quarter.
Disney estimated in its earnings release that costs related to the pandemic will total roughly $1 billion in the fiscal year 2021, though it said changes to local restrictions could alter that figure.
Here’s how Disney’s segments did in the fourth quarter in terms of revenue compared to the same quarter last year:
Parks, Experiences, and Products: $2.58 billion, down 61% year over year.
Media Networks: $7.21 billion, up 11% year over year
Studio Entertainment: $1.60 billion, down 52% year over year
Direct-to-Consumer and International: $4.85 billion, up 41% year over year.
Revenues in Disney’s studio entertainment segment fell 52% to $1.6 billion, due to lower theatrical and home entertainment results.
The company had no significant worldwide theatrical release during the quarter and faced tough comparisons to hits like “The Lion King” and “Toy Story 4,” which were released in the same quarter last year.
Disney’s home entertainment sales also suffered during the quarter as it had few titles to offer consumers. Last year during this period the company had “Avengers: Endgame,” “Aladdin” and “Captain Marvel” all going to the home market.
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