Walt Disney's revenue and market capitalization

  •   DEHOUI Lionel

The Walt Disney Company is an American media and entertainment company. It is a major global player in this sector. In 2020, its business was affected by the coronavirus health crisis, as were several other companies around the world. This has logically impacted its quarterly results in the 2020/21 financial year. Details in the lines to follow.

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Walt Disney's revenue and market capitalization
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Review of the group's activity in the first quarter of 2020/2021

The Covid-19 pandemic disrupted the smooth running of Walt Disney's business in the first quarter of 2020/21. Despite the estimated $2.6 billion impact of the health crisis, the group still returned to profit after two straight quarters of losses.

Between October and December 2020, the mass media and entertainment conglomerate posted net income of $29 million (or 2 cents per share), compared to $2.13 billion (or $1.17 per share) in Q1-2019/20. On an adjusted basis, EPS was 32 cents, down 79%.

The market was targeting a loss of 34 cents. In the first three months of the 2020/21 financial year, the group recorded sales of $16.25 billion. This was down 22% on the same period a year ago. Compared to the previous quarter, it reported an increase of 10.5%.

The turnover was also higher than the market expected. The market expected $15.9 billion in the quarter. In Q1/2020/21, segment operating profit fell by 67% to $1.33 billion.

 

Performance in Q2 2020/2021

In Q2 2020/21, Walt Disney's revenue was $15.61 billion. It reported a 13% decline compared to the same period last year. The decline was due to the coronavirus pandemic, which continued to impact the company's operations.

Its parks, experiences and products division was heavily impacted by the adverse effects of the health crisis. As a result, its revenues fell by 44% in the quarter under review. In Q2-2020/21, the entertainment group saw its EPS almost double to 50 cents, up 92%.

Excluding exceptional items, earnings per share were 79 cents, up 32%. This was slightly ahead of market expectations. The company's operating profit for the quarter was $2.46 billion, up 2%. On the other hand, Walt Disney's growth for its streaming video service did not meet market estimates.

At the beginning of April 2021, the number of registered users was 103.6 million. The market was expecting a total of 109.3 million subscribers.

 

Financial results for the third quarter of 2020/2021

Walt Disney exceeded all expectations in the third quarter, reporting strong results for the period. This was driven by strong momentum in the streaming platform and theme park business. At the end of the quarter, the number of Disney+ users reached 116 million.

This figure was higher than the market forecast. The market was targeting between 113 and 114 million subscribers for this quarter. However, the basic monthly price of the streaming service was increased by $8 in April 2021. In addition, for the whole of Q3-2020/21, the American group achieved a turnover of 17.02 billion dollars.

This was well above market expectations of $16.76 billion. Between April and June 2021, the company made an estimated profit of $923 million, compared with a net loss of $4.7 billion in the same period a year earlier. As a reminder, at that time, the pandemic severely affected its theme parks and cruises.

In Q3-2020/21, the group's "parks, experiences and ancillary products" division returned to profit for the first time since the advent of the coronavirus epidemic. Revenues from this business amounted to $4.3 billion in the quarter, compared to $1.1 billion in the same period last year.

This strong performance was helped by the partial lifting of theme park restrictions in California and Florida.

 

Quarterly update in Q4 2020/2021

In the final quarter of its 2020/21 fiscal year, Walt Disney recorded sales of $18.53 billion, compared with $14.71 billion in the same period a year earlier. Although this figure showed a clear improvement, it still fell short of market expectations.

The market was expecting $18.8 billion for the quarter. Between July and September 2021, the media and entertainment giant posted a net profit of $159 million (or 9 cents per share) compared to a loss of 39 cents per share in the fourth quarter of the 2019/20 financial year.

Adjusted EPS, meanwhile, was 37 cents, compared with 20 cents at the same time last year. This is below market estimates, which were expecting a figure of 52 cents. Furthermore, in the last three months of the 2020/21 financial year, subscriptions to the Hollywood studio's flagship platform, Disney+, slowed remarkably.

They increased by only 1.8% compared to the previous quarter. As of the end of September 2021, the total number of Disney+ users reached 118.1 million.

 

About Walt Disney's Dividend and Market Capitalization

For four decades, Walt Disney has always distributed a coupon to its shareholders. However, following the impact of the health crisis on its financial results, the company has been forced to depart from its good habit. It has suspended the payment of dividends for the time being.  

In addition, Walt Disney is also involved in the equity markets. Indeed, the company is listed on the New York Stock Exchange. It is also a component of the Dow Jones American stock market index. As of January 2022, its market capitalisation is estimated at more than 250 billion dollars.

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