Disney Q2 profit sinks on pandemic woes

NEW YORK (AP) — Disney reported a steep decline in profit as many segments of its media and entertainment offerings have ground to a standstill during the coronavirus pandemic.

Its second quarter profit dropped 91% to $475 million, down from $5.4 billion a year earlier. Overall, the company said costs related to COVID-19 cut Disney’s pretax profit by $1.4 billion.

One bright spot was its Disney Plus streaming service, which contributed to an almost $3 billion revenue increase for direct-to-consumer and international business. Overall revenue rose 21 percent to $18.01 billion, just short of the $18.06 billion analysts expected.

Disney shares fell roughly 2% in after-market trading.

In a conference call with analysts, CEO Bob Chapek said Disney plans to reopen its Disney Shanghai park on May 11. The phased opening will include limits on attendance, an advance reservation system, social distancing procedures such as wearing masks, and temperature screening and contract tracing efforts that are mandated by the government.

Disney shuttered its parks in mid-March as the new coronavirus spread. Its theme parks furloughed without pay a reported 100,000 workers in the U.S., including 43,000 workers at Walt Disney World in Orlando, Florida. Those workers can keep their benefits for up to a year.

Disney Cruise Lines have also been suspended.

The company's film studios, known for churning out blockbusters, have also suspended production. Disney pushed back most of its 2020 big budget movies, including the live-action “Mulan,” “The New Mutants,” the horror-thriller “Antlers,” and Marvel’s “Black Widow,” to late this year or beyond.

Disney-owned ESPN and its streaming arm ESPN Plus are also suffering from the dearth of live sports during the pandemic.