Summary
The Walt Disney Company's first quarter of fiscal year 2021 (ending January 2, 2021) saw a significant decline in revenues and net income compared to the prior year, largely attributable to the ongoing impacts of the COVID-19 pandemic. Total revenues decreased by 22% to $16.2 billion, while net income attributable to Disney plummeted by 99% to $17 million. Diluted earnings per share from continuing operations were $0.02, a sharp drop from $1.17 in the prior year quarter. The Disney Parks, Experiences and Products segment was the hardest hit, with revenues down 53% and a significant operating loss incurred, primarily due to park closures, reduced capacity, and the suspension of cruise operations. Conversely, the Disney Media and Entertainment Distribution segment showed resilience, with revenues down only 5%. This was driven by strong growth in Direct-to-Consumer (DTC) subscription revenue, which more than offset declines in Content Sales/Licensing. The company's DTC services, including Disney+, experienced substantial subscriber growth. Despite the challenging environment, Disney maintained a strong liquidity position with a substantial cash balance of $17.1 billion. Management highlighted ongoing efforts to mitigate the impacts of COVID-19, including cost reductions and workforce adjustments, while anticipating continued adverse effects on financial results at least through fiscal 2021. The company also provided updated segment reporting structures, consolidating media and entertainment operations into a single 'Disney Media and Entertainment Distribution' segment.
Financial Highlights
51 data points| Revenue | $15.61B |
| SG&A Expenses | $3.11B |
| Operating Expenses | $14.17B |
| Operating Income | $2.46B |
| Interest Expense | $415.00M |
| Net Income | $901.00M |
| EPS (Basic) | $0.50 |
| EPS (Diluted) | $0.49 |
| Shares Outstanding (Basic) | 1.82B |
| Shares Outstanding (Diluted) | 1.83B |
Key Highlights
- 1Total revenues for the quarter decreased by 22% to $16.2 billion compared to the prior year quarter.
- 2Net income attributable to Disney declined by 99% to $17 million ($0.02 diluted EPS) due to the severe impact of COVID-19 on the Parks, Experiences and Products segment.
- 3The Disney Parks, Experiences and Products segment reported a loss of $119 million, a significant decline from a $2.5 billion profit in the prior year, due to closures and reduced capacity.
- 4Disney Media and Entertainment Distribution segment revenues decreased by 5% to $12.7 billion, with Direct-to-Consumer (DTC) revenue surging by 73% driven by strong subscriber growth in Disney+, Hulu, and ESPN+.
- 5Disney+ subscribers more than tripled year-over-year to 94.9 million, though average revenue per user decreased due to the inclusion of Disney+ Hotstar.
- 6The company ended the quarter with a robust cash and cash equivalents balance of $17.1 billion.
- 7Management anticipates that the adverse impacts of COVID-19 will continue to affect financial results at least through fiscal 2021.