Disney to shed light on virus hit to parks, ESPN

NEW YORK/LOS ANGELES: For Walt Disney Co, the ability to sell Frozen-themed water bottles at the Magic Kingdom theme park while selling ads during the NBA playoffs has historically been its greatest strength.

But since the Covid-19 pandemic forced theme parks and cinemas to shutter and live sporting events to be cancelled, that exposure has made Disney one of the most vulnerable of its peers.

When Disney announces its third-quarter results today, investors will gauge how significantly the pandemic has hurt the company’s theme parks, TV networks and studios, while boosting streaming services like Disney+.

Disney’s theme parks are expected to take the biggest hit from the pandemic. The unit is forecast to report a US$2 billion (RM8.44 billion) quarterly loss, compared with a US$1.7 billion profit a year earlier, according to Refinitiv data.

Walt Disney World in Florida reopened in July to limited attendance. But with recordbreaking coronavirus infection rates in Florida, can Disney avoid the fate of its Hong Kong park, which reopened only to be closed again as cases spiked?

Analysts are expecting the division to be dragged down by sharp declines at ESPN. They are forecasting a US$1.97 billion quarterly profit, compared with a US$2.1 billion profit during the same period last year.

ABC missed out on the NBA Finals during the quarter; the league restarted its season on July 30. Major League Baseball’s restart on July 23 – which set TV ratings records on ESPN – has been clouded by a Covid-19 outbreak among Miami Marlins players, causing the league to postpone games. A financial rebound from the return of live sports is uncertain.

Cinemas are starting to reopen, but Disney has postponed the theatrical release of Mulan and other potential blockbusters. A few smaller films that had been scheduled to debut in cinemas were moved to Disney+.

Analysts expect the studio to post operating income of US$356 million, a 55% decline from a year earlier. How and when will Disney fully resume movie production, and what are its plans for films that are already completed?

Disney+ is expected to be a bright spot in the third quarter, as viewers remained at home. As Disney invests in building the service, analysts expect a US$1.1 billion loss in the division, about double the loss from the same period last year. – Reuters