Disney has taken a whopping $1.4 billion hit on its net income for the first quarter of 2020 largely because of the coronavirus pandemic.
Disney reported its finances for the first three months of the year ending on Tuesday, according to The Wall Street Journal. Income for the world’s largest entertainment company fell 91% from the last quarter of 2019 to $475 million; earnings plummeting because of the outbreak of the coronavirus, subsequent government shutdowns, and a continuing consolidation of assets gained in its 2019 acquisition of 21st Century Fox.
“While the COVID-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position,” Disney CEO Bob Chapek said in a statement. “Disney has repeatedly shown that it is exceptionally resilient, bolstered by the quality of our storytelling and the strong affinity consumers have for our brands, which is evident in the extraordinary response to Disney+ since its launch last November.”
Disney also announced on Tuesday that to save money, it is not paying dividends to investors for the first half of the year. Despite the savings, the company’s third fiscal quarter from April to June is likely to look even bleaker with the full effects of government shutdowns in the U.S. accounted for.
“By not issuing a semi-annual dividend, the Company will preserve about $1.6 billion in cash, based on the 88 cents a share previously paid to shareholders in January,” Disney said in a statement.
The company owns some of the most successful movie franchises and operates six popular theme parks in California and Florida, and six more located internationally in China, France, Hong Kong, and Japan. Disney has already furloughed 100,000 of its employees and faces a daunting challenge overcoming shutdowns, and then adapting to a post-pandemic world.
Disney is just one example of the extensive economic toll the coronavirus and government shutdowns have taken on the U.S. economy. Last week, the Department of Labor reported that 3.8 million more workers have filed for unemployment insurance, bringing the total number of jobless since the outbreak of the coronavirus to above 30 million, or roughly 20% of the U.S. workforce. The unemployment rate is likely the highest it has been since the Great Depression.
As The Daily Wire reported at the time:
The jobless news came a day after the Commerce Department announced the U.S. economy shrank at a 4.8% annual rate in the first quarter as the coronavirus pandemic prompted states to shut down businesses.
After the longest economic expansion in history under President Trump, the gross domestic product (GDP) posted a quarterly drop for the first time in six years, the Commerce Department said Wednesday. The GDP measures the total output of goods and services in the economy.
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