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Closure of Parks & Theaters to Mar Disney's (DIS) Q2 Earnings

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The Walt Disney’s (DIS - Free Report) second-quarter fiscal 2021 results, set to be reported on May 13, are expected to reflect setbacks it suffered from the continued closure of its theme parks and cruise ships, as well as the postponement of movie releases due to the coronavirus outbreak.

Reduced capacity due to strict social-distancing norms is expected to have hurt occupancy at its theme parks, thereby negatively impacting top-line growth.

The Zacks Consensus Estimate for Parks, Experiences & Consumer Products revenues is currently pegged at $3.02 billion, indicating a decline of 45.6% year over year.

The consensus mark for Parks, Experiences & Consumer Products operating loss is pegged at $470 million against the year-ago quarter’s reported operating profit of $639 million.
 

 

Click here to know how Disney’s overall second-quarter fiscal 2021 results are likely to be.

Media and Entertainment Distribution Revenues to Decline

In October 2020, Disney reorganized its media and entertainment operations, which have been previously reported under three segments: Media Networks,Studio Entertainment and Direct-to-Consumer & International, into a single group.

Beginning first-quarter 2021, Disney started reporting results of the media and entertainment businesses under the Media and Entertainment Distribution segment. The segment comprises Direct-to-Consumer (“DTC”), Linear Networks and Content Sales/Licensing businesses.

While DTC revenues are expected to have benefited from robust adoption of Disney+, Content Sales/Licensing segment revenues are likely to have declined due to the lack of any major release amid the shutdown of movie theaters. The coronavirus outbreak forced Disney to reschedule its movie releases.

Markedly, the Zacks Consensus Estimate for number of paid subscriber for Disney+, ESPN+ and Hulu is pegged at 110.6 million, 13.3 million and 41.1 million, respectively.

Moreover, improvement in ad demand and spending is expected to have benefited Disney-division ESPN’s ad-sales business, much similar to what cable giant Comcast (CMCSA - Free Report) , Alphabet (GOOGL - Free Report) division Google and Twitter (TWTR - Free Report) experienced in the January-March quarter.

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