Disney Theme Park Unit Lost $1B in Q2 Due To Coronavirus Shutdown

Disney said Tuesday that the estimated COVID-19 impact on the company’s second-quarter operating income at its Parks, Experiences and Products segment was about $1 billion, “primarily due to revenue lost as a result of the closures” of its Disneyland in Anaheim and Walt Disney World Resort in Orlando.

The company said the overall financial impact of the coronavirus shutdown on Q2 income from continuing operations before income taxes was as much as $1.4 billion. Overall, Disney’s total revenue in the quarter was $18 billion, edging Wall Street estimates, but adjusted earnings per share fell far short of the bar due to the COVID-19 crisis.

The company did not give an update today on the reopening of the parks, which have been closed since mid-March. A post-earnings call with analysts is underway.

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Disney Beats Wall Street Q2 Revenue Estimate But Earnings Crater Due To COVID-19

Revenues at Disney’s Parks, Experiences and Products unit (including its domestic parks and resorts and cruise line businesses) were down 10% to $5.5 billion year-over-year, while segment operating income decreased 58% to $639 million. Costs were higher compared to the prior-year quarter driven by expenses for new guest offerings including Star Wars: Galaxy’s Edge, as well as “the net cost of pay to employees who were not performing services as a result of actions taken in response to COVID-19, and inflation,” the company said in its earnings report.

Disney on March 27 extended the shutdown of its U.S. theme parks in Anaheim and Orlando, saying that Disneyland Resort and Walt Disney World Resort will remain closed until further notice. It had extended paying hourly parks and resorts cast members through April 18 before it began with salary cuts and furloughs.

In April, Disneyland reached a furlough agreement with 10 unions representing thousands of employees at the Anaheim park, which has been closed since March 14.

The latest news comes as Florida’s Orange County Economic Task Force last week issued preliminary guidelines as the state considers a phased approach to reopening the region’s theme parks. Among the initial recommendations, larger theme parks will operate at 50% capacity during a Phase 1 period, which could increase to 75% capacity in Phase 2.

Additionally, all employees will be required to wear facemasks; there will be touchless hand sanitizer at each ticketing entry and turnstile, and at each ride/attraction entry and exit; there will be temperature checks for staff prior to their shifts; as well as a regular wipe-down of all railing and surfaces. Any staff member age 65 and above will be encouraged to stay home. To help with social distancing, tape markings of 6 feet apart could be placed in the attraction and ride queues.

As for NBCUniversal, its Universal Studios Hollywood and Universal Orlando Resort and their respective CityWalks remain closed. During a subcommittee meeting of Florida Gov. Ron DeSantis’ Re-Open Florida Task Force, Universal Orlando CEO John Sprouls shared measures the resort is considering including screening employees, encouraging guests to wear face masks, disinfecting rides and attractions throughout the day and increasing the use of its virtual line system.

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