The Walt Disney Company (DIS) has also experienced its fair share of the coronavirus impact, with the closing of its theme parks and furloughing of its park workers in April to save money. Closing its theme parks was necessary for public health, to prevent the further spread of the Covid-19. Although, Disney plans to reopen some of its parks really soon.
The company, like all others, has had to make difficult decisions in controlling costs due to the coronavirus pandemic.
Disney, in its second quarter, estimated a $1.4 billion loss on its operating income from its parks, experiences, and products segment. As a result of this, its earnings per share reduced from $0.60 to $1.61 in the prior year. In addition to this, during the second quarter, Disney issued nearly $7 billion in debt offerings to raise cash. It also has more than $17 billion in available credit.
Disney also reduced capital expenditures by $900 million from the original plan, to spend $400 million less than the previous year.
To keep the company afloat and operational, Disney has made the decision to cancel its semi-annual dividend for the first half of the fiscal year, due for payment in July. By doing this, the company would be able to save $1.6 billion at the current payment of $0.88 per share.
Disney’s CFO Christine McCarthy acknowledged that the decisions were “very, very tough,” and assures the beneficiaries that the management would reevaluate the next dividends due in six months’ time.
On the brighter side, Disney’s newly launched Disney Plus has hit 54.5 million subscribers worldwide. The company said on Tuesday as it reported its quarterly earnings. The increasing success of Disney Plus has largely impacted the company’s bottom line, despite the shutdown of Disney’s theme parker and other businesses. As of April 8, the subscriber update for Disney Plus increased by 4.5 million, thus making Disney a partial beneficiary of the coronavirus pandemic. Named CEO Bob Chapek said the lockdown conditions for millions has increased the value of Disney Plus to consumers.
He, however, acknowledged that the “company’s top priority and key” to the company’s growth is their “direct to consumers (assets).” In his first earnings call with Wall Street, Chapek said despite the many disruptions caused by the pandemic, Disney Plus is making head-way. It first made its debut in Western Europe in late March, then India. It plans to extend its reach to the Nordic countries of Belgium, Luxembourg and Portugal.