November 12, 2020
Where’s a Marvel superhero when you need one? Disney Nov. 12 said fourth-quarter (ended Oct. 3) studio entertainment revenue decreased 52% to $1.6 billion and segment operating income decreased 61% to $419 million. The decrease in operating income was due to lower theatrical and home entertainment results — both due to a lack of new releases brought on by production shutdowns due to the coronavirus pandemic.
The decrease in home entertainment results was due to lower digital and DVD/Blu-ray Disc unit sales, partially offset by lower marketing costs. The prior-year quarter reflected the retail performance of Avengers: Endgame, Aladdin and Captain Marvel compared with no comparable retail titles in the current quarter.
Theatrical distribution was lower as there were generally no significant worldwide theatrical releases in the quarter compared to The Lion King and Toy Story 4 in the prior-year quarter. The decrease was partially offset by lower marketing expenses for future releases. The current quarter was negatively impacted by COVID-19 as many theaters throughout the world were either closed or operating at reduced capacity.
At studio entertainment, lower revenue due to the deferral or cancellation of significant film releases as a result of theater closures were partially offset by lower amortization, marketing and distribution costs for both the quarter and year.
Disney said it would have eight new movie projects up and running by January. CFO Christine McCarthy said the pandemic has resulted in a $3.1 billion loss, including a $2.4 billion fiscal impact from amusement parks and cruises, and a $500 million hit to media networks.