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Bob Chapek, President of Walt Disney Parks and Experiences, speaks during a media preview of the D23 Expo 2019 in Anaheim, California on August 22, 2019.
Patrick T. Fallon | Bloomberg via Getty Images
Disney will report its second-quarter 2020 earnings after Tuesday’s bell. The coronavirus pandemic has disrupted Disney’s theme parks and cruise businesses, but participation in its new streaming service, Disney +, is expected to increase.
Wall Street is anticipating earnings per share of 89 cents in revenue of $ 17.80 billion, according to Refinitiv consensus estimates. However, it is difficult to compare the reported earnings with analysts’ estimates for Disney’s second quarter, as the pandemic continues to affect global economies and makes the impact of earnings difficult to assess.
This is the first earnings report with Bob Chapek at the helm of Disney, after former CEO Bob Iger announced in February that he would move on as CEO. Iger was expected to retire in late 2021, but he told investors he decided to resign to focus on creative projects now that big companies like the Fox merger and the launch of Disney + were behind him.
Shortly after Iger resigned, orders to stay home accelerated across the US. USA And he was called back to the company’s daily operations, New York Times columnist Ben Smith reported last month.
The coronavirus pandemic has caused Disney many headaches. The company has faced theater closings, movie and television production stops, docked cruises, closed theme parks, and the suspension of most live sporting events on its ESPN and ABC networks.
Disney has suspended thousands of union and non-union workers at its theme parks and resorts. Disney parks in the USA USA And Paris has been closed since March and its Asian parks closed since February, although the gradual reopening of some places there began in March. The segment represented 37% of Disney’s total $ 69.6 billion revenue last year.
Analysts are currently divided on when the theme parks will reopen. Some anticipate June 1 as the correct date to reopen, while others do not anticipate the gates of the park to open until 2021. Rival Universal Studios is using May 31 as a placeholder date for a possible opening.
Regardless of when Disney parks will reopen, analysts predict a three-year period before returning to 2019 profitability, as the need for social distancing, travel restrictions, and new health precautions will remain until a widely available vaccine is available. .
To cut costs, Disney took a $ 5 billion line of credit and cut the executive pay, including a 50% pay cut for Chapek. Iger is giving up his salary, according to an internal memo previously obtained by CNBC. In June, the Disney board will decide whether to pay its usual summer dividend.
There may be better news for Disney’s streaming business, as people spend more time indoors looking for TV shows and movies to watch. Netflix saw a huge increase in subscribers in its first quarter of 2020 during the pandemic.
Last quarter, Disney reported 26.5 million subscribers for Disney + at the end of December, with about 20% joining through a free trial with Verizon. At the time of Disney’s earnings call in early February, Iger said that number had already risen to 28.6 million subscribers. In April, Disney announced that Disney + has 50 million subscribers. Disney also owns two other major streaming services, Hulu and ESPN +.
This story is unfolding. Check back for updates.
Disclosure: Universal Studios theme parks are owned by NBCUniversal, the parent company of CNBC.
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