Disney+ Subs Surpassed 54.5M; COVID-19 Dealt $1.4B Q2 Hit

Disney estimates it took a $1.4 billion hit from COVID-19 in Q2 ended March 28 through the closure of its theme parks, cruise lines, retail stores and studio operations, plus the lack of live sports on ESPN, said senior executives on a Tuesday call. The pandemic’s “widespread disruptions” sent earnings plunging to 60 cents a share from $1.61 in Q2 a year earlier, said CEO Bob Chapek, his first call since being named in February to succeed Bob Iger. The response to Disney+ “has exceeded even our highest expectations,” said Chapek. Disney+ had 33.5 million subscribers, 26% more than the 26.5 million it had at the Dec. 28 close of Q1. The service launched in mid-November and passed 50 million subscribers in early April after the launch of the service in Western Europe and India. Disney+ surpassed 54.5 million subscribers through the close of business Monday, said Chief Financial Officer Christine McCarthy. Disney’s direct-to-consumer business had an $812 million operating loss on revenue of $4.1 billion, including Disney+, ESPN+ and Hulu. The segment had a $385 million operating loss Q2 a year earlier. Chapek and McCarthy sidestepped questions about whether the faster-than-expected growth of Disney+ means the service can achieve profitability sooner than previously planned.