The Walt Disney Co.’s net income fell sharply in its most-recent quarter, as the coronavirus pandemic still weighs heavily on many of its businesses, from theme parks to movies.
But the results Thursday surpassed Wall Street’s expectations thanks to subscribers flocking to Disney+ and other of the entertainment giant’s streaming services.
Disney’s parks and resorts have been closed or operating at significantly reduced capacity since shortly after the pandemic forced lockdowns across the U.S. in March of last year. Its cruise ships have also been suspended during that time, live sporting events have been canceled, and film and TV projects have been disrupted.
Disney said it expects coronavirus disruption to cost about $1 billion in its current fiscal year. The biggest hit to the company in the quarter that ended Jan. 2 was the closure and limited reopening of its theme parks, which cost the company about $2.6 billion.
The company based in Burbank, California, has been focusing on its steaming services — Disney+, ESPN+, and Hulu — to drive growth. Disney+ subscribers totaled 94.9 million at the end of the quarter, more than double the subscriber base a year ago, when the service had been operating for only about two months. ESPN+ subscribers jumped 83% to 12.1 million and Hulu subscribers rose 30% to 39.4 million.
For Disney’s fiscal first quarter, net income totaled $17 million, or 1 cent per share, compared with $2.1 billion or $1.16 cents per share a year earlier. Excluding one-time items, net income totaled 32 cents per share, compared with $1.53 per share in the prior-year quarter.
Revenue fell 22% to $16.25 billion from $ 20.88 billion.
The results beat Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for a loss of 45 cents per share. Eleven analysts surveyed by Zacks expected revenue of $15.84 billion.
Disney’s stock rose about 1.7% in after-market trading following the release of the earnings report. The shares are up 5.4% since the start of the year, compared with a 4.3% rise in the S&P 500 index.