With its parks shuttered and cruise ships ported due to the coronavirus, The Walt Disney Co. reported a steep drop in operating income Tuesday in its “parks, experiences and products” sector, but the company announced plans to reopen Shanghai Disneyland next week.
Disney’s theme park and cruise sector saw a 58% drop in operating income in the second quarter, compared to the quarter a year ago, while revenue fell 10% to $5.5 billion. Disney’s famed attractions have been closed for nearly two months due to the pandemic.
Overall, the company reported diluted earnings per share of 60 cents, a 63% drop from $1.61 in the second quarter of last year.
“While the COVID-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position,” CEO Bob Chapek said in a statement. “Disney has repeatedly shown that it is exceptionally resilient, bolstered by the quality of our storytelling and the strong affinity consumers have for our brands, which is evident in the extraordinary response to Disney+ since its launch last November.”
Thanks to the Disney+ streaming service, the company’s direct-to-consumer sector saw a jump in revenue from $1.1 billion to $4.1 billion year-over-year.
Disney last month began to furlough non-essential theme park employees, and all of the company’s top executives took pay cuts, with Executive Chairman Bob Iger forgoing his salary altogether.
The company announced Tuesday that given the financial disruption of the pandemic, Disney will forgo payment of its semi-annual cash dividends for the first half of the year. The move is expected to save about $1.6 billion.
Meanwhile, the company announced a planned re-opening of Shanghai Disneyland, beginning May 11. The park will be operated with capacity-control measures, with visitors required to purchase advance tickets for specific dates. Lines at attractions will be controlled and ride vehicles will be loaded in a way to ensure social distancing of guests. Hand sanitizer will be provided at attraction entries and exits, and cleaning will be increased at “high-touch” locations.
There is still no word on when the company’s theme parks in Anaheim will be allowed to reopen.
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