Disney revenue better than Wall St. expected

Firm starts to climb out of the pandemic

Walt Disney Co. on Thursday reported quarterly revenue that was better than Wall Street expected as live sports returned to ESPN and the company's theme parks began recovering from shutdowns due to the coronavirus pandemic.

Overall revenue fell 23 per cent to US$14.71 billion in the quarter, above analysts' average estimate of about US$14.2 billion.

Disney's adjusted loss per share, excluding one-time items, of 20 cents, also beat Wall Street expectations of a more drastic 70 cents per share loss.

Disney shares jumped 5.6 per cent to US$143.12 in after-hours trading.

One year after it launched the Disney+ online streaming subscription to compete with Netflix Inc., Disney said the service had signed up 73.7 million subscribers. Hulu had 36.6 million customers and ESPN+ had 10.3 million.

Disney+ faces a test, however, as a one-year free trial offer for millions of Verizon Communications Inc. customers expired on Thursday. Disney aims to gain new signups with the release of a “Star Wars” Lego holiday special this month, Pixar movie Soul at Christmas, and Marvel series WandaVision in January.

Disney's businesses outside of streaming have been hammered by the global COVID-19 pandemic. The outbreak forced the company to close theme parks, suspend cruises and delay movie releases, and it left ESPN without major sports broadcasts. Disney said the pandemic reduced profit at its parks units by US$2.4 billion.

“Even with the disruption caused by COVID-19, we've been able to effectively manage our businesses while also taking bold, deliberate steps to position our company for greater longterm growth,” chief executive Bob Chapek said in a statement.

The parks have started to welcome back visitors and sports leagues have resumed play, though a rise in cases in Europe and the United States threatens that progress.

During the quarter that ended in September, most of Disney's theme parks, including its flagship resort in Florida, had reopened but with limited attendance, mask requirements and other safeguards. The parks and consumer products business lost US$1.1 billion in operating income, less than analysts expected.

Disneyland in California has been shut since March, and Disneyland Paris was forced to close for a second time in October as virus cases spiked in France.

At the media networks segment, the return of major sports helped boost ESPN. The unit reported US$1.9 billion in operating income, up five per cent from a year earlier.

Profit at the movie studio slumped 61 per cent to US$419 million, as the company delayed major movie releases until 2021 and many theatres remained closed.

Disney is continuing to adjust the lines of reporting at its TV unit following a big reorganization announced last month that tightened the entertainment giant's focus on streaming.

Gary Marsh, who has run the Disney Channel and its siblings for the past nine years, will now supervise Disney-branded content that the TV unit creates for networks and streaming services, including Disney+. Courteney Monroe, who previously served as president of National Geographic's TV networks, now heads content for that brand, reporting directly to Peter Rice, the chairman of Disney's television division.

Other senior programming executives, including TV studios chief Dana Walden, ABC News president James Goldston and FX chairman John Landgraf, continue in their roles, although with more control over approving shows, particularly for the company's streaming services.

“This is a big change to our legacy television structure, which was built around linear networks,” Rice said in a memo Tuesday. “This reorganization is an opportunity for us to fully focus on what we do best, making great programming for viewers wherever they choose to watch their favourite shows.”

THIS IS A BIG CHANGE TO OUR LEGACY TELEVISION STRUCTURE.