How Much Are Theme Park Closures Costing Disney?
Disney's (NYSE: DIS) parks and resorts went from one of its biggest sources of operating income to a major drag on earnings in a matter of a few weeks. It closed its Shanghai and Hong Kong parks in January, and its Tokyo parks closed at the end of February. In mid-March, Disney closed the rest of its parks as the novel coronavirus spread rapidly throughout the world.
For the company's fiscal second quarter, operating income from Disney's parks segment fell 58% to $639 million, and it's only going to get worse. Shanghai is now the only Disney park open, and management hasn't provided a timeline for its other parks to resume operations.
"We estimate the approximate monthly impact on [earnings before interest and taxes] will remain in the $1 billion range," Bernstein analyst Todd Juenger recently wrote in a note to investors. That's a huge drag on earnings, and it might be prolonged.
Source Fool.com
