According to details, the company has estimated a loss of some $1.4 billion from the COVID-19 in the current fiscal quarter as a result of a massive hit to its theme parks and other operations due to worldwide lockdowns.
Disney stated that its net income for the three months ending in March dropped 91 percent to $475m. The total revenues rose 21 percent to $18 billion for the company, with media operations showing strong growth.
After estimating the losses from pandemic as much as $1.4 billion, Disney executives sought to assure investors that the company would weather the storm.
“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,” said Bob Chapek, named chief executive earlier this year.
Walt Disney, last month, stopped paying more than 100,000 workers from this week as it struggles to cope with losses amid coronavirus lockdown. The company operates theme parks and hotels in the US, Europe, and Asia.
Stopping pay for almost half of its workforce will save Disney up to $500m (£400m) a month, according to the US newspaper.
Despite still being in the money-losing stage, Disney’s direct-to-consumer division performed better than expected. Losses at the division, which includes Disney+, came in at $812m – less than the $900m analysts were projecting.
While analysts expect Disney to “be given a pass from investors” with its 2020 earnings, the company’s recovery could take two years or more, according to a note this week from Moffett Nathanson. The research firm reduced its opinion on Disney to neutral from buy.
“Disney is built on shared group experiences,” Light shed Partners’ Rich Greenfield said in a note on Tuesday in which he told clients to sell the shares. “Until there is global comfort health-wise with that behaviour again, Disney’s earnings are fundamentally impaired.”