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Walt Disney reported on the results of the second fiscal quarter

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Walt Disney reported on the results of the second fiscal quarter
May 06
09:00 2020

An American company Walt Disney Co., one of the world leaders in media and entertainment, has published financial statements for the second fiscal quarter of the current year. It became known that the company’s net profit had fallen by 91%.

A press release issued simultaneously with the statements informs that the net profit for the reporting period has amounted to only 475 million US dollars (0.26 US dollars per share). For the same period a year earlier, the company managed to record the net profit of about 5.431 billion US dollars (3.53 US dollars in terms of one share). Also, operating profit has dropped to a value of $ 2.416 billion. Last year, the same indicator was equal to 3.816 billion US dollars, i.e. the decrease has totaled 37%. Despite this, the revenue has increased 21% and amounted to 18.009 billion US dollars.

The consensus forecast was much more optimistic than reality. The revenue was estimated at $ 18.06 billion; adjusted earnings had to be equal to $ 0.91 per share. Analysts did not take into account that the company would be forced to give up the filming of new entertainment content.  Rescheduling of the planned premieres and the closure of theme entertainment parks have influenced the company’s state of affairs too.

Disney’s division engaged in the park and cruise ship management has shown a 10% reduction in revenue. However, the operating profit has fallen by 58% to $ 639 million. The analysts at Walt Disney Co. have estimated that the consequences of the pandemics have cost the division $ 1 billion.

Disney has a powerful media division, including National Geographic and ESPN. Things are going well there – the revenue for the quarter has increased 28%; the profit has grown by 7%.

After the publication of the negative quarterly report, Disney’s shares have dropped by 2%. Since the beginning of the year, the American company’s capitalization has fallen by about 30%.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company
UFT Group

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