The Most Alarming Thing About Disney's Earnings Wasn't the Impact of Park Closures
As was largely expected, the coronavirus pandemic took a toll on Walt Disney (NYSE: DIS) last quarter. Although the top line was up more than 20% thanks to a booming cable television business, the closure of its theme parks and hotels as well as movie theaters proved costly. Operating income fell nearly 40% year over year, from $3.8 billion to $2.4 billion. Again, though, nothing about that profit headwind was a surprise.
There was something of a curveball buried in the breakdown of Disney's differing business units, however, for the three-month stretch ending in March. While its streaming service Disney+ has become a fast-growing hit, this business is proving very expensive to run. The company's direct-to-consumer (and international) arm contributed $4.1 billion to the top line, but its operating loss more than doubled year over year.
It's not too soon to start asking where Walt Disney's breakeven point on streaming lies.
Source Fool.com
