Disney Warns Coronavirus Pandemic Makes Estimates 'Challenging'

Walt Disney warns that the coronavirus pandemic is making it difficult to estimate its future performance.
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Walt Disney  (DIS) - Get Report warned Thursday that the coronavirus pandemic was making it difficult for the entertainment giant to estimate its future performance.

Shares of the Burbank, California-based company were rising 5.4% to $93.59 in trading Thursday.

"The impact of the novel coronavirus (“COVID-19”) and measures to prevent its spread are affecting our businesses in a number of ways," Disney said in a filing with the Securities and Exchange Commission. "We have closed our theme parks; suspended our cruises and theatrical shows; delayed theatrical distribution of films both domestically and internationally; and experienced supply chain disruption and ad sales impacts."

In addition, Disney said, "there has been a disruption in creation and availability of content we rely on for our various distribution paths, including most significantly the cancellation of certain sports events and the shutting down of production of most film and television content."

"We expect the ultimate significance of the impact of these disruptions," the filing said, "including the extent of their adverse impact on our financial and operational results, will be dictated by the length of time that such disruptions continue which will, in turn, depend on the currently unknowable duration of the Covid-19 pandemic and the impact of governmental regulations that might be imposed in response to the pandemic."

Disney also said that its businesses could be affected if the disruptions caused by coronavirus lead to changes in consumer behavior.

"The Covid-19 impact on the capital markets could impact our cost of borrowing," the company said. "There are certain limitations on our ability to mitigate the adverse financial impact of these items, including the fixed costs of our theme park business. Covid-19 also makes it more challenging for management to estimate future performance of our businesses, particularly over the near to medium term."

Disney recently postponed the release of the Marvel movie “Black Widow.” The film was scheduled for a North American theatrical debut on May 1. A new date hasn’t been chosen.