CNN reports, Disney’s profit plummeted 91% to $475 million in the three months to March 28 as the coronavirus caused significant damage to all of the media empire’s areas of business.
Although sales for its second quarter were up 21% to $18 billion, the dramatic financial fallout stemmed from Disney’s closure of its Walt Disney World and Disneyland theme parks as well as Disney Stores, the suspension of its cruises, supply chain disruptions and the huge costs associated with getting the Disney+ streaming service off the ground.
Disney’s parks, experiences and products unit was hit particularly hard when income dropped a staggering 58% compared to last year — a result of Disney shuttering its theme parks and resorts around the world.
The company said its operating income on its Parks, Experiences and Products segment fell about $1 billion due to lost revenue. It estimates that the impacts of coronavirus across all its businesses was as much as $1.4 billion. All twelve of Disney’s parks in North America, Asia and Europe have been closed since March 15, CNN reports.
However, the company announced plans on reopening its Shanghai park on May 11, welcoming visitors at a heavily reduced capacity with new health and prevention procedures.
Disney’s theme parks furloughed a reported 100,000 workers without pay in the U.S., including 43,000 workers at Walt Disney World in Orlando, Florida. However those workers can keep their benefits for up to a year.
Disney also said that it will not pay investors a dividend for the first-half of fiscal 2020.
The company estimates the move will preserve about $1.6 billion in cash, based on a per-share dividend of 88 cents.
Bob Chapek, who took over as chief executive of Disney from Robert Iger, expressed confidence in the company’s assets.
“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,” Chapek said in a statement.