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Disney Suspends Quarterly Dividend

By John F. Heerdink, Jr.

The Walt Disney Company (DIS) reported quarterly earnings and suspends its dividend payment as coronavirus lockdowns drain businesses of earnings.

Updates from the Senior Leadership Team:

CFO, Christine McCarthy stated that the company will forgo a July dividend payment to preserve $1.6 billion of cash assuming the dividend to be constant at 88 cents per share. Newly appointed CEO Bob Chapek informed that the Shanghai Disneyland closed since January, is set to reopen on May 11 with all precautionary measures in place. Also, the company announced it had 50 million Disney+ subscribers in early April and 54.5 million subscribers as of May 4.

Key Earning Highlights :

  • Revenue grew 21% to $18.01 billion.
  • EPS of 60 cents was reported, excluding-items.
  • Media networks revenue increased by 28% to $7.26 billion, but advertising revenue fell due to lower average viewership.
  • Parks’ revenue dropped 10% to $5.54 billion, and operating income took a $1 billion hit from Covid-19.
  • Studio revenue increased by 18% to $2.54 billion.
  • Direct-to-consumer revenue, which includes streaming, nearly increased four times to $4.12 billion while operating losses widened from $385 million to $812 million.
  • Total operating income was $2.42 billion in the quarter, down from $3.82 billion, depicting a 37% drop.

Disney earnings were hurt due to the COVID-19, as the pandemic closed theme parks, stopped cruises, and delayed new movie releases. Parks were Disney’s major profit driver in 2019, and Disney’s movie studios contributed 31% of the global box office last year.

Streaming services like Disney+ have seen a rise, with titles like “Frozen II,” “Onward” and “Star Wars: The Rise of Skywalker” were made available on the platform months ahead of schedule.

Dow 30 Component, The Walt Disney Company (DIS),  and its subsidiaries is a diversified worldwide entertainment company that operates in four business segments: Studio Entertainment, Media Networks, Parks and Resorts, and Consumer Products & Interactive Media. To learn more about this Dow 30 Component, The Walt Disney Company (DIS), and to continue to track its progress please visit the Vista Partners Walt Disney Company, Coverage Page. 


Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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(Read Original Story: Disney To Skip Dividend Payment After Earnings Miss Badly in Investor's Business Daily)


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