BURBANK, Calif. — With the Covid-19 pandemic adversely affecting many segments of its company (Parks are closed, cruise ships docked, no movies premiering), The Walt Disney Company still reported solid revenue growth overall and in its media networks (cable networks and broadcasting) and direct-to-consumer businesses in particular (including Disney+) for the second quarter of 2020.
However, it also reported a 90% drop in net income and cancelled its dividend.
Disney reported US$18 billion (all figures in USD) in overall revenues for Q2 2020, a 21% increase from the $14.9 billion in revenues it reported in the same quarter in 2019. Revenues in its media networks segment increased 28% to $7.3 billion in the second quarter of 2020, compared Q2 2019, due to higher program sales and acquisitions from 21st Century Fox. As a result of the launch of the Disney+ streaming service last November, the company’s direct-to-consumer and international segment grew by 260% to $4.1 billion in Q2 2020.
In terms of segment operating income, Disney’s media networks operating income increased 7% to $2.4 billion in Q2 2020, compared to $2.2 billion in Q2 2019. However, the company’s direct-to-consumer and international segment reported an operating loss of $812 million in Q2 2020, compared to its operating loss of $385 million in Q2 2019, a 110% loss increase year over year. Disney attributed the increase in operating loss in its direct-to-consumer segment to costs associated with the launch of Disney+ and the consolidation of its Hulu streaming service.
Overall, the company’s total segment operating income decreased 37% to $2.4 billion in Q2 2020, down from $3.8 billion in Q2 2019. This is primarily due to the decreases in revenue and income felt by Disney’s parks, experiences and products segment, which was hit particularly hard due to closures as a result of the Covid-19 pandemic, says the release. The company’s overall net income from continuing operations was $475 million in Q2 2020, a 91% plunge from the company’s Q2 2019 net income of $5.4 billion.
“While the COVID-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position,” said Bob Chapek CEO of The Walt Disney Company, in the news release. “Disney has repeatedly shown that it is exceptionally resilient, bolstered by the quality of our storytelling and the strong affinity consumers have for our brands, which is evident in the extraordinary response to Disney+ since its launch last November.”
As of March 28, 2020, the end of the second quarter, Disney+ was reporting 33.5 million paid subscribers. In a conference call to discuss its financial results Tuesday evening, Disney executives said Disney+ now has 54 million subscribers, as of May 4.
For the full details of Disney’s financial results for the second quarter and first half of fiscal 2020, please click here.
