Disney revenue better than expected as it starts climbing out of Covid-19

Walt Disney 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 coronavirus

By Lisa Richwine and Akanksha Rana

(Reuters) - 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% to $14.71 billion (£11.22 billion) in the quarter, above analysts' average estimate of about $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% to $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 $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 long-term 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 $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 $1.9 billion in operating income, up 5% from a year earlier.

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

Disney in October announced a restructuring designed to put more emphasis on streaming as the company's future. The streaming unit, known as direct-to-consumer and international, has been losing money as it invests to build Disney+. For the quarter that ended in September, the division lost $580 million, less than the $1.0 billion that analysts expected.

 

(Reporting by Akanksha Rana in Bengaluru and Lisa Richwine in Los Angeles; Editing by Arun Koyyur and Cynthia Osterman)