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Disney Takes a Pandemic Hit, and There’s Worse to Come Disney Takes a Pandemic Hit, and There’s Worse to Come
(30 days later)
LOS ANGELES — Last year at this time, Disney was celebrating the record-breaking arrival of “Avengers: Endgame” in theaters. On Tuesday, with movie theaters closed worldwide, along with theme parks, Disney said that its quarterly profit fell more than 90 percent.LOS ANGELES — Last year at this time, Disney was celebrating the record-breaking arrival of “Avengers: Endgame” in theaters. On Tuesday, with movie theaters closed worldwide, along with theme parks, Disney said that its quarterly profit fell more than 90 percent.
And that was for a period that was only partly affected by the coronavirus.And that was for a period that was only partly affected by the coronavirus.
“Our businesses have been hugely impacted,” Bob Chapek, Disney’s new chief executive, told analysts on a conference call, noting that theme park employees had been furloughed (an analyst-estimated 100,000 of them) and executives have taken steep pay cuts. “We’re doing everything we can to mitigate the impact of the cash burn.”“Our businesses have been hugely impacted,” Bob Chapek, Disney’s new chief executive, told analysts on a conference call, noting that theme park employees had been furloughed (an analyst-estimated 100,000 of them) and executives have taken steep pay cuts. “We’re doing everything we can to mitigate the impact of the cash burn.”
Disney said its board had voted to forgo payment of its summer dividend, preserving about $1.6 billion in cash.Disney said its board had voted to forgo payment of its summer dividend, preserving about $1.6 billion in cash.
Mr. Chapek declined to say when Walt Disney World in Florida or Disneyland in California might reopen. (They closed in mid-March.) What about production on large-scale movies? When might shooting resume? “No projections,” he said.Mr. Chapek declined to say when Walt Disney World in Florida or Disneyland in California might reopen. (They closed in mid-March.) What about production on large-scale movies? When might shooting resume? “No projections,” he said.
Because of its size and lack of diversification, Disney has been badly hobbled by the coronavirus pandemic. But the quarter that ended on March 30 was broadly affected for only a couple of weeks. Walt Disney World, for instance, was closed for 17 days of the period; the vast resort could be closed for the entirety of the current quarter.Because of its size and lack of diversification, Disney has been badly hobbled by the coronavirus pandemic. But the quarter that ended on March 30 was broadly affected for only a couple of weeks. Walt Disney World, for instance, was closed for 17 days of the period; the vast resort could be closed for the entirety of the current quarter.
Disney did say that its newest theme park resort, Shanghai Disneyland, would reopen on May 11 with “controlled capacity,” temperature checks and everyone wearing masks. “Queues will be structured and ride vehicles will be loaded to promote social distancing,” Disney said. Mr. Chapek said that Shanghai Disneyland attracted roughly 80,000 people a day under normal conditions. For the moment, the Chinese government wants capacity capped at 24,000 a day.Disney did say that its newest theme park resort, Shanghai Disneyland, would reopen on May 11 with “controlled capacity,” temperature checks and everyone wearing masks. “Queues will be structured and ride vehicles will be loaded to promote social distancing,” Disney said. Mr. Chapek said that Shanghai Disneyland attracted roughly 80,000 people a day under normal conditions. For the moment, the Chinese government wants capacity capped at 24,000 a day.
“We’re actually going to open far below that,” Mr. Chapek said, “to get our training wheels on.”“We’re actually going to open far below that,” Mr. Chapek said, “to get our training wheels on.”
Disney’s theme parks have long been watched as a bellwether for the broader economy. It is unclear whether the masses — now reeling from widespread pay cuts and job losses — will be able to afford Disney vacations when the gates do reopen. It took two years for Disney’s parks and cruise ship division to fully recover from the last recession.Disney’s theme parks have long been watched as a bellwether for the broader economy. It is unclear whether the masses — now reeling from widespread pay cuts and job losses — will be able to afford Disney vacations when the gates do reopen. It took two years for Disney’s parks and cruise ship division to fully recover from the last recession.
The company must also navigate other troubling media trends. TV advertising (Disney owns ESPN, ABC, FX and other channels) is plummeting. Newly cost-conscious consumers are also canceling their cable service in larger numbers. At least 1.6 million people cut the cord between January and April, about 20 percent more than analysts had expected.The company must also navigate other troubling media trends. TV advertising (Disney owns ESPN, ABC, FX and other channels) is plummeting. Newly cost-conscious consumers are also canceling their cable service in larger numbers. At least 1.6 million people cut the cord between January and April, about 20 percent more than analysts had expected.
Profit in the most recent quarter, the second in Disney’s fiscal year, totaled $475 million, down 91 percent from $5.43 billion in the same period a year earlier. Excluding one-time items, per-share profit fell 63 percent, to 60 cents from $1.61.Profit in the most recent quarter, the second in Disney’s fiscal year, totaled $475 million, down 91 percent from $5.43 billion in the same period a year earlier. Excluding one-time items, per-share profit fell 63 percent, to 60 cents from $1.61.
Revenue added up to $18 billion, however, an increase of 21 percent that was largely attributable to Disney’s integration of certain 21st Century Fox assets, including FX.Revenue added up to $18 billion, however, an increase of 21 percent that was largely attributable to Disney’s integration of certain 21st Century Fox assets, including FX.
Analysts had been expecting per-share earnings of 88 cents and revenue of $17.8 billion. Since late January, when Shanghai Disneyland closed because of the coronavirus in China, Disney shares have fallen almost 30 percent. Its stock fell about 2 percent in after-hours trading on Tuesday.Analysts had been expecting per-share earnings of 88 cents and revenue of $17.8 billion. Since late January, when Shanghai Disneyland closed because of the coronavirus in China, Disney shares have fallen almost 30 percent. Its stock fell about 2 percent in after-hours trading on Tuesday.
Operating income for the last quarter at Disney Parks, Experiences and Products, a division that includes theme parks, cruise vacations and retail stores, totaled about $639 million, a decline of roughly 58 percent. Disney said the pandemic took a $1 billion bite out of the unit’s operating profit.Operating income for the last quarter at Disney Parks, Experiences and Products, a division that includes theme parks, cruise vacations and retail stores, totaled about $639 million, a decline of roughly 58 percent. Disney said the pandemic took a $1 billion bite out of the unit’s operating profit.
Losses at Disney’s streaming business, anchored by Disney Plus and Hulu, widened to $812 million from $385 million, largely because of costs associated with rolling out Disney Plus in Europe. Analysts had expected $886 million in losses. Disney said that streaming losses would total roughly $1.1 billion in the current quarter, which will include the introduction of Disney Plus in Japan. Disney Plus now has 55 million subscribers.Losses at Disney’s streaming business, anchored by Disney Plus and Hulu, widened to $812 million from $385 million, largely because of costs associated with rolling out Disney Plus in Europe. Analysts had expected $886 million in losses. Disney said that streaming losses would total roughly $1.1 billion in the current quarter, which will include the introduction of Disney Plus in Japan. Disney Plus now has 55 million subscribers.
Updated June 2, 2020
Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.
Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
More than 40 million people — the equivalent of 1 in 4 U.S. workers — have filed for unemployment benefits since the pandemic took hold. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said.
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
The only Disney division to improve its position in the quarter was television, where total income rose 7 percent, to $2.38 billion. Cable profit increased 1 percent and broadcasting profit soared 53 percent, largely because of Fox assets. ESPN, which now has virtually no live events to show, declined, although ratings for a 10-part documentary series on Michael Jordan have been strong.The only Disney division to improve its position in the quarter was television, where total income rose 7 percent, to $2.38 billion. Cable profit increased 1 percent and broadcasting profit soared 53 percent, largely because of Fox assets. ESPN, which now has virtually no live events to show, declined, although ratings for a 10-part documentary series on Michael Jordan have been strong.
In recent days, prominent analysts downgraded Disney. Citing “significant and unrivaled earnings risk for the foreseeable future,” Michael Nathanson of MoffettNathanson moved the company to neutral from buy. Richard Greenfield, a founder of LightShed Partners, lowered Disney to sell from neutral, writing in a note to clients that there “is no clarity on when vacation travel normalizes, nor when movie theater attendance normalizes.”In recent days, prominent analysts downgraded Disney. Citing “significant and unrivaled earnings risk for the foreseeable future,” Michael Nathanson of MoffettNathanson moved the company to neutral from buy. Richard Greenfield, a founder of LightShed Partners, lowered Disney to sell from neutral, writing in a note to clients that there “is no clarity on when vacation travel normalizes, nor when movie theater attendance normalizes.”
It was Disney’s first earnings report since its longtime chief executive, Robert A. Iger, abruptly transferred power to Mr. Chapek, who took over as chief executive on Feb. 25 and joined Disney’s board on April 15. Mr. Iger, now executive chairman, opened the call with analysts, however. He said that he had been working “in partnership” with Mr. Chapek.It was Disney’s first earnings report since its longtime chief executive, Robert A. Iger, abruptly transferred power to Mr. Chapek, who took over as chief executive on Feb. 25 and joined Disney’s board on April 15. Mr. Iger, now executive chairman, opened the call with analysts, however. He said that he had been working “in partnership” with Mr. Chapek.
“A challenge of this magnitude,” Mr. Iger said, requires “all hands on deck.”“A challenge of this magnitude,” Mr. Iger said, requires “all hands on deck.”
Mr. Iger and Mr. Chapek both emphasized their expectations for a full recovery over the long term. “What we create has never been more necessary or more important,” Mr. Iger said. “People find comfort and inspiration in our messages of hope and optimism.”Mr. Iger and Mr. Chapek both emphasized their expectations for a full recovery over the long term. “What we create has never been more necessary or more important,” Mr. Iger said. “People find comfort and inspiration in our messages of hope and optimism.”