Disney's FY20 Q3 Earnings (8/4/20)

[pheneix]

Disney did not lose 5 billion this quarter.

Yeah they did

Disney Earnings Report Reveals Rare Loss

The entertainment company’s revenue fell 42% in the latest quarter as the pandemic wreaked havoc on its theme parks and other businesses, resulting in a $4.72 billion loss.

www.wsj.com

 

[MisterPenguin]

Q: $5 Billion charge for international markets. Will you do more direct to consumer internationally? What about cable cutting... will ESPN go direct to consumer?

Christine: The $5B was because of depression/suppression of linear channels (international Disney TV Channels).

Bob: Sports is great. Sports is most viewed content. Sports is profitable. We'll adapt ESPN when it's necessary.

 

[brianstl]

Disney did not lose 5 billion this quarter.

THey lost $4.8 billion on continuing operations. They lost $4.8 billion this quarter.

 

[Slpy3270]

The $5 Billion dollar charge was for international operations (writing the value of the international channels down to their value). It would have happened with our without Covid-19. Also, if there are no baseball games on ESPN, then they don't have to pay MLB for the rights. But ESPN is still on and playing alot of re-runs which we are watching. Not sure there is some nefarious scam going on here.

I'm betting the write-down was related to the Disney Channels in the UK closing in a month from now.

 

[tirian]

Q: Do you have enough production ready to ramp up? Where's my dividend!!!?

Bob: We like what we got and we gots the stuff!! New content helps D+, and deeper catalogue keeps 'em.

Christine: Management recommended for first half of fiscal year, no dividend. And we need that money for the biz. Now for the second half of the year, we still need to decide and if the biz still needs it. And if we put in the biz, the biz does better and your stock does better.

Quick tangent: The report says Disney makes and average of $4.62/month per subscriber. That’s not much to float the entire company, even at 52 million subs. But once everything is up and running again, it’s a nice chunk of change for making old Vault content available again. (That’s not a complaint. Bring on more Vault Disney!)

 

[brianstl]

I think he's referring to potential money.

No thet lost almost $5 billion in real money. People need to learn how to read a report.

 

[britain]

"Once things get back to normal and people vacation like they used to, THEN we'll let you know hotel occupancy numbers."

Sheesh!

 

[BlackCauldron]

"Once things get back to normal and people vacation like they used to, THEN we'll let you know hotel occupancy numbers."

Sheesh!

But - "pent up demand is there." Sure, Jan.

 

[MisterPenguin]

Q: What's up with WDW not being profitable since I seem to be totally ignorant of current events. On D+, give us more guidance which you said you won't at that time!

Christine: Florida. Hot Spot. A-duh!! Hotel occupancy is meaningless right now because it's so low... a-duh. Per caps are up with the few that are attending.

Bob: Different guests spend differently. Out of staters staying a week and staying at resort is per cap higher. When those higher per caps come back up, there will be more profit.

Yes, we want D+ to grow. A-duh.

"New, hot, tentpole" makes subs grow. (I'm betting he's referring to Hamilton and Frozen 2)

 

[CaptainAmerica]

I really need some education here. According to Marketwatch, "Walt Disney Co. reported a quarterly loss of nearly $5 billion Tuesday". "The loss was largely due to a $4.95 billion charge Disney took" "After adjusting for that charge and other factors, Disney reported net income of 8 cents a share, compared with $1.34 a share a year ago."

So Disney actually lost money for the quarter??? Sounds like accounting tricks making it seem better.

Then, you get the following statement: "Disney’s earnings were helped by an accounting maneuver in the TV business that boosted operating income beyond expectations. Disney said that it moved costs related to its ownership of rights to sports programming to future quarters because U.S. professional sports were not played in the quarter. That boosted operating income in the media-networks segment to more than $3 billion, 48% higher than last year and nearly double analysts’ average expectation."

So even more accounting scams???? I guess this is why they pay CFOs tons of money.

"Charges in the current quarter were due to goodwill and intangible asset impairments ($4,953 million) and severance and contract termination costs related to the acquisition and integration of TFCF ($94 million). Charges in the prior-year quarter included severance costs related to the acquisition and integration of TFCF and an acceleration of equity based compensation, primarily for TFCF awards that vested upon closing the acquisition."

In English, this basically means that when they added Fox assets to their books, they overestimated their value by about $5 billion and they're correcting it. That resulted in a loss "on paper" but it has nothing to do with cash. The adjustment actually undoes accounting nonsense, it doesn't create it.

 

[danv3]

Nice dig at APs by @realBobChapek . . . "less valuable" than vacationing guests staying longer.

(Despite locals and APs making up 50% (!!!) of guests at WDW right now)

 

[Brer Oswald]

They keep throwing around the term “tent pole”. Not so sure they understand what it means.

 

[CaptainAmerica]

Yeah they did

Disney Earnings Report Reveals Rare Loss

The entertainment company’s revenue fell 42% in the latest quarter as the pandemic wreaked havoc on its theme parks and other businesses, resulting in a $4.72 billion loss.

www.wsj.com

Those are "noncash losses" related to intangible assets from the Fox acquisition.

 

[brb1006]

Since the Earnings Call is over. Here's one last Spongebob clip before @pheneix drops his new thread later today.

 

[brianstl]

I'm betting the write-down was related to the Disney Channels in the UK closing in a month from now.

It wasn't a write-down. The $5+ billion was a credit they could apply this quarter because of charges they had to book in previous quarters
related to their purchase of Fox. They were able to book the credits now in this quarter because that marked the one year mark of owning Fox. It makes it look like they made money for the quarter on paper when they actually lost billions.

 

[Beacon Joe]

Q: What's up with WDW not being profitable since I seem to be totally ignorant of current events. On D+, give us more guidance which you said you won't at that time!

Christine: Florida. Hot Spot. A-duh!! Hotel occupancy is meaningless right now because it's so low... a-duh. Per caps are up with the few that are attending.

Bob: Different guests spend differently. Out of staters staying a week and staying at resort is per cap higher. When those higher per caps come back up, there will be more profit.

Yes, we want D+ to grow. A-duh.

"New, hot, tentpole" makes subs grow. (I'm betting he's referring to Hamilton)

They should re-release Hamilton, recasting that one guy who cannot sing.

 

[Creathir]

Considering that there is no theater viewing and this is an exclusive release, I think $15 would be a pretty significant bargain.

I don't think Disney cut out out the middle man with the intentions of passing on the savings to their dear customers

Meh.
I’d gladly pay $50 at the theater with popcorn etc for the single viewing.

I will not spend $35.99 to watch this movie in my living room over and over.

 

[CaptainAmerica]

I'm betting the write-down was related to the Disney Channels in the UK closing in a month from now.

No. It's Fox assets that had been overvalued by Fox and Disney fixed Fox's bad numbers.

 

[brianstl]

Those are "paper losses" related to intangible assets from the Fox acquisition. It's not a cash loss.

It isn't paper losses, it is paper revenue from the purchase of Fox they now can put on the books because of past paper losses they had to put on the books due to buying Fox.

 

[VaderTron]

Drunken child at work again. Company shows huge losses in parks with no control over fixing the root cause. Stock goes up 5% after hours.