Biggest News From The Walt Disney Q2 Earnings Call

May 6, 2020


On May 5 2020, the Walt Disney Company reflected on their Q2 earnings and laid out their plans going forward in the wake of the coronavirus. Bob Iger (The Chairman of The Board), Bob Chapek (The Chief Executive Officer), Christine McCarthy (The Senior Executive Vice President), and more were on the call to discuss the issues at hand.

The Impact of The Coronavirus on Disney

Like most companies, Disney has been negatively affected by the coronavirus. Bob Iger called the circumstances “unprecedented” and stated that they “have hit [Disney] hard”. Nevertheless, Iger still believes that Disney can emerge relatively unscathed since Disney has so far shown itself to be “resilient” during the company’s lifetime. This of course is good news which could spell hope for investors and brokerages. Iger pointed to the company’s brands including Marvel and Star Wars which have still managed to connect “with consumers throughout this crisis”. Iger’s confidence covers up Disney’s losses as McCarthy later predicted the “adverse impact” to be as much as $1.4 billion. The coronavirus has certainly cost Disney a lot of money. Disney’s earnings per share has fallen considerably from $1.61 last year to $0.60 now. Therefore, due to this dire financial situation, Disney’s Board has decided to forgo the dividend payment for the first half of the fiscal year. Disney is also looking to reduce their capital spending. However, McCarthy does state that it is too early to consider financial decisions for 2021.

Disney+ is a Huge Success

Disney’s streaming service, Disney+, has been an unprecedented success as expected. On the call, Chapek announced that the service had surpassed 50 million subscribers globally and that the company plans to continue its rollout to the rest of the world. In June, Disney+ will arrive in Japan. Disney+ will arrive in the Nordics, Belgium, Luxembourg, and Portugal in September, and in Latin America at the end of the year. Chapek also commented on the streaming service’s growing library which now includes Onward and Frozen 2 as early releases and he especially focused on the Mandalorian, Disney+’s most successful show. Furthermore, as was announced previously, Chapek reiterated Disney’s plans to launch Artemis Fowl on the streaming service on June 12th.

While Disney+ must be earning Disney a lot of money, they have also incurred huge losses due to the launch of the streaming service since the Direct-to-Consumer & International segment operating losses were $427 million higher in the quarter. The money spent on Disney+ will eventually pay off but for now, the streaming service is responsible for losses. In response to a question, Chapek still maintained though that the company will continue to pour money into content like The Mandalorian for Disney+ in the coming years. The success of other Disney media services including ESPN was also highlighted by the Disney executives.

Have you seen this:
Bodhi Sabongui Slated for Pivotal Role in 'Black Adam'

Reopening Theme Parks

Since mid-March, Disney’s theme parks have been closed worldwide. Now as some countries plan to exit the lockdown, Disney is considering opening their theme parks once again. For the company, theme parks have been a major source of profit so it makes sense that they would want to reopen them. What is surprising is how soon Disney intends to start their plans. Chapek commented that China is gradually returning to “some semblance of normalcy” so Disney plans to reopen their Shanghai theme park in less than a week on May 11. Other theme parks surely can be expected to follow suit in the coming months.

Things will not go completely back to normal though in theme parks as Disney’s measures may include controlling guest capacity, density control measures, and overall health and prevention procedures that comply with guidelines. Chapek referenced social distancing as one of the measures that will be taken in Shanghai as well as the use of masks, temperature screenings, etc.


During this crisis, while Disney has shut down all filming, Iger commented that they have kept parts of their “creative pipeline” open. This includes “a number of writing and development projects” and they have also continued post-production work. Chapek responded to a question about large scale productions by saying that they will go through the same process with them as with the theme parks all the while ensuring the safety of everyone involved. At the moment though, Chapek cannot predict when these productions will resume.

Theatrical Releases

Due to the coronavirus pandemic, Disney has rescheduled a lot of their theatrical releases. Mulan has been delayed to July 24th, Black Widow to November 6th, Soul to November 20th, Free Guy to December 11th. Only Artemis Fowl so far as stated before forewent a theatrical release and is set to release on Disney+. On the call, Chapek reaffirmed Disney’s commitment to the theatrical experience for blockbuster releases highlighting Disney’s huge success last year when it released seven $1 billion films. However, Chapek did acknowledge these extreme circumstances and said that the company may have to change their plans either due to theaters simply not being open or due to theatrical releases no longer being commercially viable.

Have you seen this:
Big Finish Doctor Who: Stranded 1 (Review)

On the subject of films going to Disney+ or to PVOD for a high price, Chapek said that the company is evaluating each of their films “on a case-by-case situation”. According to Chapek, Artemis Fowl is set to release on Disney+ due to “the demographics of appeal of that film” which is a reference to the film’s potential audience. This has been seen with Universal as well who chose to forgo theatrical release and release Trolls World Tour on PVOD for a premium price. PVOD seems to be the likely option for The New Mutants film, the last leftover Fox film related to the X-Men. The New Mutants has been endlessly delayed and was originally set to be released on April 13 2018. Disney is in an awkward position with The New Mutants since they want to eventually integrate the X-Men into the MCU. Nevertheless, many believe that Fox’s leftover film deserves to be seen. Disney would waste no money in releasing it and might actually profit off a PVOD release that could garner hundreds of millions of dollars.


The Walt Disney Company’s Q2 Earnings Call was very insightful but also very predictable. Walt Disney executives did shine light on the financial impacts of the coronavirus on the company and also their plans going forward; however, apart from a few new details, there were no shocking revelations and the main purpose of the call was evidently to reassure investors about Disney’s future. The company is making big losses but the executives pivoted to the success of Disney+ and their hopes to get everything back to normal. With an Apple buyout still rumoured to be on the table, Disney is not safe yet and will most likely still be reeling from the effects of the coronavirus in the months and maybe the years to come.

Transcript of the call available here.

Did you miss breaking news?We publish new content every day.

Get our daily summary and monthly recap so you never miss out...