Walt Disney Company reports Q2 2021 earnings showing more than $1billion decrease in earnings at Parks, Experiences and Products due to COVID-19

May 13, 2021 in "The Walt Disney Company"

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Posted: Thursday May 13, 2021 4:10pm ET by WDWMAGIC Staff

The Walt Disney Company has today reported its Q2 2021 earnings, and as expected COVID-19 continues to heavily impact the financial performance.

Revenue at Disney’s Parks, Experiences and Products segment fell 44% to $3.2 billion. In the report, Disney estimates the total net adverse impact of COVID-19 compared to the prior-year quarter was a decrease in segment operating income of approximately $1.2 billion.

According to the earnings call, attendance trends continue to steadily improve, and guest spending per capita grew double digits vs the previous year. Looking forward, park reservations are strong.

"We’re pleased to see more encouraging signs of recovery across our businesses, and we remain focused on ramping up our operations while also fueling long-term growth for the Company," said Bob Chapek, Chief Executive Officer, The Walt Disney Company. "This is clearly reflected in the reopening of our theme parks and resorts, increased production at our studios, the continued success of our streaming services, and the expansion of our unrivaled portfolio of multiyear sports rights deals for ESPN and ESPN+."

You can view the full earnings report here, and below is the Parks, Experiences and Products statement.

Disney Parks, Experiences and Products
Disney Parks, Experiences and Products revenues for the quarter decreased 44% to $3.2 billion, and segment operating results decreased $1.2 billion to a loss of $406 million. Lower operating results for the quarter were due to decreases at our parks and experiences business, partially offset by growth at our consumer products business.
As a result of COVID-19, Disneyland Resort and Disneyland Paris were closed and our cruise business was suspended for all of the current quarter, whereas these businesses closed in mid-March of the prior-year quarter. Hong Kong Disneyland Resort was open for approximately 30 days during the current quarter, compared to approximately 25 days in the prior-year quarter. Walt Disney World Resort and Shanghai Disney Resort were both open in the current quarter. In the prior-year quarter, Walt Disney World Resort closed in mid-March and Shanghai Disney Resort closed in late January. Our parks and resorts that were open during the quarter operated at significantly reduced capacities.
We estimate the total net adverse impact of COVID-19 compared to the prior-year quarter was a decrease in segment operating income of approximately $1.2 billion.

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RSoxNo1May 16, 2021

Most fans prefer to watch their local broadcasts, and the weekday option didn't give ESPN exclusivity. Fox has a better deal with MLB. The other issue is simply that baseball has a massive pace of play problem. I'm a Red Sox season ticket holder and have been a diehard baseball fan my entire life. They need to find an effective way to reduce the time of game to be 2 hours and 45 minutes with greater consistency. There are some steps that they've taken that are good, but they need to do more. Like most "problems" in this world, there's never a magic bullet solution and multiple things need to change to improve it. This is more than just pitch clocks, it's also about the style of play itself.

seascapeMay 15, 2021

Disney is losing money on Disney+. However, you do not realize how much more money Disney+ is paying Disney Studios for the programming. Netflix was only paying Disney $300 million a year for Disney Owned content. In order to determine if Disney+ is profitable for Disney, which it is, is to determine the revenue of disney plus $3.99 per month per subscriber which totals $414,960,000 a month. That is $4,979,520,000 a year. How much of that money is for operations and how much for the Studios? Disney is making money on streaming and lots of it. Profits and losses for each Division is subject the the corporate leadership of the company to allocate it but Disney would be losing money, not making money, if they were still under contract with Netflix.

Slpy3270May 15, 2021

It probably wouldn't be much different and may have cost a lot more jobs there given how video streaming is a money-losing business and you can't make cuts to a division you consider a "growth" division. Netflix is only valued ~$500 a share because idiot hedge funds and investors cannot see the dot-com/digital newspaper bubble-like economy streaming will soon create and crater. Netflix, Amazon, Disney and the like may all survive but see their positions diminished, HBO Max will only survive thanks to cable bundling (literally all their subs are through cable or third-party providers, ironically including Disney-owned Hulu) and services like Peacock, Tubi, Apple TV+ and Paramount+ will probably fail and disappear. There's a reason Sony isn't jumping into the streaming game; their deals with Netflix and Disney will bring in far more quarterly revenue than D+, Netflix and Prime Video will.

LilofanMay 15, 2021

It is strange I've played baseball for many years when I was young enjoyed the practices, games , workouts, bus rides to visiting team ballparks, watching my friends play however now that I'm older it is almost like a snooze fest to watch a MLB game on TV. One cool giveaway when at a MLB game many years ago was that it was bat night. All fans at the ballpark that day receive a free baseball bat. One aspect of MLB baseball that is very popular is spring training in FL. Fans visiting FL visiting WDW and watching a few games of their teams up close and personal in those small ballparks.

OvertheHorizonMay 15, 2021

I own a couple of hundred shares of Disney stock. I first bought when it was $99 and again at $116. It's currently down from its high of $200 in the past year, but still a good investment to hold for the long term. I'm grateful every day that Disney got into the streaming business when they did. Imagine Disney stock in this past year if they hadn't.

DisoneMay 15, 2021

And you would be right. Official masks now optional while outdoors and 3 feet apart for guests.

LdnoMay 15, 2021

Even Kramer mentions to have faith in Disney but still this dip wasn’t as bad as June 24th of last year.

Slpy3270May 14, 2021

$DIS down 2.58%. That's shockingly resilient.

mikejs78May 14, 2021

J4546May 14, 2021

love jomboy youtube channel! great content. And i dont even like baseball haha

disneygeek90May 14, 2021

In case you're legitimately interested, here's a bit of a breakdown as of why. It doesn't really have anything to do with popularity.

J4546May 14, 2021

i dont think disney stock is undervaued at all. even with all the park closures.

LilofanMay 14, 2021

Long term hold is the way to go. The day traders buying and selling frequently won't last seeing what Disney will do.

DranthMay 14, 2021

I know you are joking but even if they did it wouldn't help much as parks returning to their former glory is already baked in at this point and they are going to find it hard to meet those expectations. If it does turn around and keep going up it is likely going to be because no one has anywhere else to put their money. I dropped my position in DIS a while back because it really just seems WAY overvalued at this point. Hope I am wrong and it is nothing but 💲 for everyone who is still in but I just don’t see the value of late.