The Walt Disney Company second quarter earnings call revealed new information on how the theme park and movie studio company is dealing with the coronavirus pandemic, while showing signs of improvement for business results. In the second quarter, Disney’s diluted earnings per share (EPS) from continuing operations for the quarter increased to $ 0.50 from $ 0.26 in the previous year quarter. Diluted EPS for the quarter increased 32% to $ 0.79, from $ 0.60 in the prior year quarter. EPS from continuing operations for the six months ended April 3, 2021 decreased 64% to $ 0.52 from $ 1.43 the previous year. The results for the quarter and the half-year ended April 3, 2021 were negatively impacted by the coronavirus. The company reported sales of $ 15.6 billion in the quarter.
“We are pleased to see more encouraging signs of recovery in our business and we remain focused on ramping up our operations while fueling the long-term growth of the company,” said Bob Chapek, CEO of The Walt Disney Company, in a report. “This is clearly reflected in the reopening of our theme parks and resorts, increased production in our studios, the continued success of our streaming services and the expansion of our unrivaled portfolio of multi-year sports rights contracts. for ESPN and ESPN +. ”
The Disney Parks, Experience and Products segment, which includes Disney Parks and Resorts, Disney Cruise Line and Consumer Products, has felt the largest impact as since the end of the second quarter of In fiscal year 2020, some arms in the segment were closed or were operating at a reduced pace. capacity. Disney Parks, Experiences and Products posted a $ 1.2 billion year-over-year decline in operating income. Disneyland Resort, Disneyland Paris and Disney Cruise Line were all closed for the duration of the quarter. Hong Kong Disneyland Resort was open for 30 days in the second quarter, and Walt Disney World and Shanghai Disneyland Resort were both open for the entire quarter. Chapek said 80% of the cast members they asked to return to work did so and “ create magic for the guests. ”
Walt Disney World visitor attendance trends continue to improve and customer spending is up double digits from the previous year. The Florida resort also “met the goal of a net positive contribution, meaning that revenues exceeded the variable costs associated with the opening,” according to the call.
Disney has already started expanding capacity at Walt Disney World and will continue to do so throughout the summer, as guidance from the CDC and local authorities arrives. “We have already started to increase our capacity, the advice we obviously received from the CDC today regarding those who have been vaccinated no longer necessarily need to wear masks, both outdoors and inside. This is really big news for us, especially if someone has been to Florida in the middle of summer with a mask on. It could be quite intimidating. So we think that is going to make the experience even more enjoyable and we think that as we are now bringing a lot of people back to work, this is going to be an even bigger catalyst for the growth in attendance, and we were very happy with that. day, ”Chapek said. “So I think you’re going to see an immediate increase in the number of people who have been able to enter our parks thanks to our reservation systems that we have recently put in place. So we’re very, very excited about it.
Disney’s Direct-to-Consumer business operating results in the quarter improved by more than $ 500 million from a year ago, driven by stronger results at Hulu and ESPN +. Disney + results were on par with the previous year’s quarter, as the increase in subs was offset by higher content, marketing and technology costs.
Disney + now has 103.6 million paying subscribers worldwide. Disney is on track to meet its goal of 230-260 million subscribers by the end of fiscal 2024, according to Chapek.
Disney-owned studios have been hit by theatrical closures, but Disney is hoping people want to return to theaters this summer. Because of these movies like Cruella, Black Widow, and The jungle cruise will be released simultaneously on Disney + and in theaters with Premier Access. Pixar Luca will air exclusively on Disney + at no additional cost. Later this year, Marvel’s Shang-Chi and the legend of the ten rings will be released with an exclusive 45-day theatrical release. All of these, along with the original series, will all make their way to Disney streaming platforms for everyone to see after a set amount of time.
Based on the call for results, Disney is starting to slowly recover, as many arms of the company shut down quickly after the start of the coronavirus pandemic. The reopening of more movie studios, theaters and vacation destinations will continue to have a positive impact on The Walt Disney Company.