Walt Disney company information
Walt Disney (NYSE:DIS) suffered horrific results in the spring and summer as the COVID-19 pandemic shut down many of the company's most important operations while placing huge roadblocks in front of other Disney businesses. Movie theaters closed down alongside the theme parks, cruise ships, and hotels. Disney's cable TV networks saw lower advertising activity, and ESPN was reduced to showing reruns of sporting events in lieu of live-action games. Third-quarter sales fell 41% year over year, and earnings dropped from $1.35 to $0.08 per share.
Disney's stock plunged as much as 48% below December's highs in March and is still trading 8% lower in 2020. The parks are back in business, albeit with lower attendance and tight social distancing rules. ESPN is showing some live sports again. The company rerouted some of its cinematic content to premiere on the Disney+ streaming instead, inspiring a spike in downloads of the Disney+ app.
Everything is most certainly not back to normal yet, and it could take a long time to get there. But Disney is armed with a massive stockpile of cash and undrawn credit lines, and it's not like the company's fans are giving up on Mickey Mouse and Cinderella. Disney+ is becoming a powerhouse in the digital media market as we speak.
Long story short, Disney is poised to make a full recovery from this dark period and the stock is sure to follow suit. It might take some time, but successful investing is all about patience anyhow. Buy Disney shares now at a modest discount and you might get to sit back and enjoy returns from the gold standard of entertainment stocks for decades to come.
End October, Disney announced a reorganization with the goal of prioritizing Disney's stream video business. Streaming is the new model for distribution, so this move makes sense.