Overcoming Challenges in Theme Parks, Disney Shines in Other Areas
Yesterday, Disney, the entertainment powerhouse, released its financial results for the last quarter. With ongoing closures of its theme parks due to the global pandemic, Disney experienced a 23% drop in revenue and a decrease of 20 cents per share in value. Despite these setbacks, investors view Disney’s Q4 as a success due to various positive factors.
Although Disney’s revenue declined in Q4 2020 compared to the previous year, it managed to surpass analysts’ expectations. Analysts had predicted a 27% decline, but Disney only saw a 23% decrease, exceeding estimates by 4%. Despite the overall revenue dip, Disney still recorded a profit of $14.71 billion, surpassing the predicted $14.20 billion in profits.
Despite significant losses from closed theme parks, Disney saw a considerable revenue boost from its streaming platform, Disney+. Streaming services have soared in popularity, with platforms like Hulu and ESPN+ also experiencing increased valuation. The rise in at-home entertainment consumption over the past eight months due to the global situation has notably contributed to the surge in streaming subscriptions. Disney+ exceeded expectations with a remarkable 73.7 million subscribers, surpassing projections set for 2024.
Celebrate the #Plusiversary with Disney+! How many characters can you spot in this fun poster? ?: Ross Murray pic.twitter.com/TzJLArfsvv
— Disney+ (@disneyplus) November 13, 2020
Despite the financial impact of closed parks, Disney is faring better than its competitors. While Disney experienced a 61% drop in revenue due to park closures globally, Universal Studios Orlando and Seaworld faced steeper losses at 81% and 78%, respectively. With the unparalleled brand influence that Disney possesses, it has managed to weather the storm better than its rivals such as Universal Studios Orlando and Seaworld, despite the challenges faced in the theme park industry.
