Walt Disney Co. outlines business impact, states future performance predictions are ‘more challenging’

An SEC filing by the Walt Disney Co. today provides a concise view of all the businesses impacted by the coronavirus COVID-19 pandemic and warns investors that predicting future performance is going to be more challenging.

According to the filing: “The impact of the novel coronavirus (“COVID-19”) and measures to prevent its spread are affecting our businesses in a number of ways. 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 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, 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.

“Our businesses could also be impacted should the disruptions from COVID-19 lead to changes in consumer behavior. The COVID-19 impact on the capital markets could impact our cost of borrowing. 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’s stock price has plummeted in the past month from $141.30 a share to $93.65. The volatile stock market has had an impact on all companies. But many analysts remain bullish with a long-term view on Disney’s long-term prospects.

“If the global economy stabilizes during the summer and company hotels, parks, cruises and movie releases are allowed in May, Disney could undergo a sizable recovery by the end of 2020,” said, Paul Franke a private investor and speculator with over 30 years of trading experience.