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Shares of the media giant the Walt Disney Company (NYSE: DIS) popped over 3% to trade around $139.98 during Thursday’s after-hours trading session after the company reported better than expected Q4 results. During the past three months, Disney reported 73 million paid subscribers for its streaming service, Disney+. Notably, the company also posted a smaller-than-expected loss for the previous quarter. Disney reported a loss of 20 cents per share on revenue of $14.71 billion. Analysts expected a loss of 71 cents per share on revenue of $14.2 billion.
Although Disney stocks have been on the receiving end at the height of the coronavirus pandemic, they experienced a turn around in the past three months.
According to metrics provided by MarketWatch, Disney stocks have dropped approximately 6.30% year to date. However, in the past three months they have popped 3.48% and are now up 6.41% and 6.74% in the last one month and five days respectively.
The company faces fierce competition from other streaming companies including Netflix Inc (NASDAQ: NFLX) and Apple Inc (NASDAQ: AAPL). However, with a market valuation of approximately $249.05 billion, Disney is capable of delivering competitive content in the market.
As the coronavirus infection rate indicates a possible second wave before a viable vaccine is approved by different government agencies, content demand is expected to remain high in the coming quarters.
Disney Q4 Further Analysis
Although the company reported better than expected Q4 results, the company thinks the California authorities’ decision to close parks despite the measures put in place is uncalled for.
“Our health and safety protocols are all science-based and have the support of labor unions representing 99% of our hourly cast members,” CEO Bob Chapek said.
With coronavirus posing unprecedented future risks, Disney estimates that it will incur a cost of up to $1 billion in the 2021 fiscal year. During the past three months, different Disney segments fared differently. The parks, experiences and products reported revenue of $2.58 billion, 61% down year over year.
The media network segment reported a revenue of $7.21 billion, 11% up year over year. Disney studio entertainment segment reported a revenue of $1.60 billion, which was 52% down year over year. And last but not least, the direct to consumer and international segment reported a revenue of $4.85 billion, approximately 41% up year over year.
Notably, with Disney California parks closed due to the coronavirus crisis, the company was prompted to lay off 28,000 of its workers in the month of September. In addition, the company announced earlier this week that more of its employees at its California theme parks will face furlough. However, the company did not disclose the total number of its employees affected by the new directives.
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