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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 |
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| 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. |
| Updated June 22, 2020 | Updated June 22, 2020 |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| 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. | 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. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| 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. | 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. |
| 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. | 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.) | 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.) |
| 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’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. | 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. |
| 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. | |
| 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.” |