Disney Plus reaches 54.5 million subscribers globally

With COVID-19 impacting Disney's Q2 results, the company board has decided to forgo the next semi-annual cash dividend

e4m by exchange4media Staff
Updated: May 6, 2020 9:20 AM
The Walt Disney Company

The Walt Disney Company reported diluted earnings per share (EPS) from continuing operations for the quarter which decreased by 93% to $0.26 from $3.53 in the prior-year quarter.

The company said, excluding certain items affecting comparability, diluted EPS for the quarter decreased by 63% to $0.60 from $1.61 in the prior-year quarter. EPS from continuing operations for the six months ended March 28, 2020 decreased 73% to $1.44 from $5.42 in the prior-year period. Excluding certain items affecting comparability, EPS for the six months decreased by 38% to $2.14 from $3.45 in the prior-year period. Results in the quarter and six months ended March 28, 2020, were adversely impacted by the novel Coronavirus (COVID-19) pandemic.

“While the COVID-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position,” said Bob Chapek, Chief Executive Officer, The Walt Disney Company. “Disney has repeatedly shown that it is exceptionally resilient, bolstered by the quality of our storytelling and the strong affinity consumers have for our brands, which is evident in the extraordinary response to Disney+ since its launch last November.”

The company also mentioned that, as on May 4, Disney Plus has reached 54.5 million subscribers globally. Chapek said that the company's key priority focuses on its Direct to Consumer business. He said, “The response to Disney Plus even exceeded the highest expectations. Since our initial launch in November, we continue to expand in other markets. In late March, despite COVID-19, we had a successful launch of Disney Plus in Western Europe followed by a highly successful launch in India. In just five months we have surpassed 50 million subscribers globally. It's a significant milestone for us. We are pleased to see the growth in four weeks since then.”

Direct-to-Consumer & International revenues for the quarter increased from $1.1 billion to $4.1 billion and segment operating loss increased from $385 million to $812 million.

The increase in operating loss was due to costs associated with the launch of Disney+ and the consolidation of Hulu. Results for the quarter also reflected a benefit from the inclusion of the TFCF businesses due to income at the international channels, including Star. Commencing March 20, 2019, as a result of our acquisition of a controlling interest in Hulu, 100% of Hulu’s revenues and expenses are included in the Direct-to-Consumer & International segment. Prior to March 20, 2019, only the Company’s ownership share of Hulu results was included (as equity in the loss of investees) The average monthly revenue per paid subscriber for ESPN+ decreased from $5.13 to $4.24 due to the introduction of a bundled subscription package of Disney+, ESPN+ and Hulu beginning in November 2019. The bundled offering has a lower retail price than the aggregate standalone retail prices of the individual services.

The average monthly revenue per paid subscriber for the Hulu SVOD Only service decreased from $12.73 to $12.06 driven by lower retail pricing. The average monthly revenue per paid subscriber for the Hulu Live TV + SVOD service increased from $52.58 to $67.75 due to higher retail pricing.

The Board of Directors also announced that it will forgo payment of a semi-annual cash dividend for the first half of fiscal 2020, given the significant operational and financial disruption caused by COVID-19.

The Board’s action is one of several measures the Company has taken in the wake of the pandemic, including reducing capital spending, cutting salaries for senior management, and making the difficult decision to furlough employees. By not issuing a semi-annual dividend, the Company will preserve about $1.6 billion in cash, based on the 88 cents a share previously paid to shareholders in January.

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