Disney Likely to See Massive Profit Losses Due to Coronavirus

May 5, 2020
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Disney is expected to take a massive profit hit due to the coronavirus pandemic.

CNBC reported that last year, Disney's Parks, Experiences, and Consumer Products division was its primary and fastest source of income. But in the last few months, things have taken a turn for the worst as the COVID-19 global outbreak continues to devastate the nation.

The Walt Disney Company has taken a particularly hard hit as the majority of its business, including theme parks, movie production, cruises, and vacation resorts, having temporarily ceased operations.

Back in March, the Walt Disney Company closed down its theme parks in Anaheim, California, and Orlando, Florida, due to the quickly spreading coronavirus.

Earlier this week, Wall Street shared Disney's reports for the second-quarter results as they prepare for the worst.

Analysts are predicting a 45% year-over-year decline in the company's fiscal second-quarter per-share earnings, the New York Post reported.

This week, the company's stock opened at $105.50. For 52 weeks, the stick was $152.41. Since the pandemic started in March, the stock lingered above $100. Before the chaos happened, it traded at more than $140.

“It’s clear that Disney sits at the center of the storm for COVID, whether we’re talking parks or studio and the impact on people visiting movie theaters to a knock-on effect or a recession and what that will stimulate for cord cutting,” said Bernstein Research analyst Mike Morton.

Even when things finally begin to reopen, experts warn it will take time for businesses to go back to normal.

Walt Disney World is steadily preparing for the magical day when it can reopen its park gates again. A group of appointed officials, referred to as the Orlando County Economic Recovery Task Force, met up virtually to develop a preliminary set of guidelines that will be implemented when the parks eventually get the green-light to resume operations.

According to the report posted by Variety, the park will begin allowing visitors back in two phases.

In Phase 1, the parks would be allowed to operate at 50-percent capacity. In Phase 2, operational capacity would be bumped to 75-percent capacity.

The other guidelines seem to adopt best practices used by grocery stores and essential businesses since the pandemic began spreading.

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