Disney's June Quarter Earnings to Drop 14% Due to Park Closures, Sports Cancellations: Analyst

Coronavirus-related havoc will mean the period's revenue and earnings will be significantly lower than expected, according to Needham.
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Disney's is looking at a tough June quarter owing to coronavirus-related disruptions. 

Cancellation of major league sports, delayed film openings and the closure of Disney theme parks worldwide will mean a significant hit to Disney's revenue and earnings for the quarter ending in June, wrote Needham's Laura Martin in a note on Friday. 

Shares of Disney  (DIS) - Get Report were up 6.04% to $97.39 amid a partial market recovery from Thursday's crash. 

"COVID-19 is having a disproportionately negative impact on DIS's three largest profit centers," wrote Martin, referring to Disney's parks, ESPN and films segments. She estimated that June quarter revenue will fall by 7.6% and EPS by 14% compared to prior estimates. 

The new estimates are $19.7 billion in quarterly revenue and $1.20 per share in earnings, and assume normal operations for Disney's parks, ESPN, and films segments by the end of June.

Disney announced that it will close its theme parks worldwide through at least the end of March, and is likely to delay some major film openings, including Mulan, as authorities urge individuals to avoid crowds. The delay or cancellations of the NCAA, NBA, MLB, and other sports seasons will add programming costs and lower ad revenue, according to Martin. 

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