Good news and bad news for Disney investors; the Walt Disney Company just posted their earnings for the first fiscal-quarter on Tuesday, with the totals above their earning expectations.
The company’s new Disney+ streaming service, featuring the insanely popular The Mandalorian, was cited as a major earner for the company, reaching 26.5 million subscribers since launch. However, civil unrest in Hong Kong and the ongoing coronavirus outbreak are projected to cause a large hit to earnings in the second quarter of this fiscal year.
According to a survey by Refinitiv, Disney reported a revenue of $20.86 billion, compared to the projected value of $20.79 billion. This netted investors an additional 9 cents per share above the expected value. This jump in expected earnings comes from the multiple successes Disney had during their first quarter, including the launch of Disney+, the opening of Star Wars: Rise of the Resistance, and the release of Frozen II and Star Wars: The Rise of Skywalker.
However, it’s not all churros and popcorn in the House of Mouse. The ongoing situation in China has posed some significant challenges for the coming fiscal quarter. Hong Kong Disneyland has seen an operating income drop of $80 million, largely due to international reports of protests that have made both domestic and international travelers reluctant to visit the parks. This, combined with the recent closure of both Hong Kong and Shanghai Disneyland due to concerns over the coronavirus, is expected to cause a decline of about $175 million in the second fiscal quarter of 2020.
The outbreak is a double whammy as well, as it comes during the peak travel season in China, forcing Disney to cancel its extensive Lunar New Year celebrations at the affected parks.
Until Q2 earnings are posted, analysts will continue to monitor the market and the developing situation in China to determine Disney’s fate. Be sure to stay tuned to All Ears for more updates on this story as it progresses!
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