Earnings at the Magic Kingdom are dropping faster than a sinking log flume.
The Walt Disney Co. on Tuesday reported a fiscal third-quarter loss of $4.72 billion, after reporting a profit in the same period a year earlier. The company posted revenue of $11.78 billion in the period, $870 million short of Wall Street's expectations.
The Burbank, California-based company has been losing millions of dollars every day its theme parks were. Its Florida theme parks reopened in July with health and safety guidelines in place, including limits on the number of visitors allowed inside. Meanwhile, most of California's Disneyland remains closed as coronavirus cases mount in the state.
"To put things in perspective, Magic Kingdom has capacity of 90,000 and does over 57,000 on an average day," said Richard Greenfield, a prominent equity analyst and founder of Lightshed Partners. "Hours are reduced, many restaurants are closed and on-property hotels have pushed back planned reopenings. Simply put, the parks are bleeding cash, with no end in sight," he said.
Delayed releases of long-expected films, including Avatar, Star Wars, Tenet and Mulan, also hurt the company's bottom line. Mulan will premiere on the Disney+ streaming service on September 4, bypassing most theaters altogether, Disney CEO Bob Chapek saidˇ on an earnings call Tuesday.
Disney shares have dropped 19% since the beginning of the year, while the S&P 500 has climbed slightly more than 2%. In the final minutes of trading on Tuesday, Disney shares hit $117.29, a fall of 15% in the last 12 months.