Disney's operations did manage a small profit.It is amazing the amount of people that actually think Disney eked out a profit. Disney isn’t even trying to pass that off as a story. The way accounting rules work meant the posted paper revenue this quarter, just as in previous quarters they had to post paper costs. Neither are real money.
They lost $4.8 billion on continuing operations. That is there financial performance for the quarter. They lost a massive amount of money.
What went down the toilet was their International Channels business. They spent billions to get it going but the business model fell apart. They are dumping it and switching to Direct-To-Consumer (DTC).
Previously, they valued their Asia-Pacific channels as worth $5 Billion. They are now saying it's a loser and they are dumping it. As a result, they have to write off that asset as an impairment. An impairment is a permanent reduction in the value of a company asset. That's written off against the company's profits. As a result, corporate Disney as a whole lost money, a lot of it.
Operating margin (profit or loss) has to do with revenue taken in by the company versus what it cost to generate that revenue. By this measure, Disney achieved a small profit.
Let's say you run a cab business and you have a fleet of 10 cabs. You collected $100K in revenue and it only cost you $90K to operate those cabs, then your operations were profitable by $10K.
But now let's say one of those cars was destroyed by a Kraken and you didn't buy Kraken insurance. That cab was worth $20K so you have to write it off. As a result, your business lost $10K.
This is what happened to Disney. Disney's operations made a little bit of money but corporate Disney lost a boatload.