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Summary
- Walt Disney observed an uptick of more than 6% in its share price after health officials gave a green signal to reopen theme parks in California.
- The parks are required to open with limited capacity and heightened safety requirements.
- With the opening expected in April, Disney is anticipating a recovery in its key business segment.
Wall Street seems delighted over the news of the reopening of Disneyland and other theme parks in California under the revised state guidelines.
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Under the new rules set by Californian health officials, theme parks, outdoor entertainment venues and stadiums in the US state are expected to reopen their gates in April 2021, months after their closure due to the pandemic-induced circumstances.
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The statement was released by the health officials last week. Consequently, Walt Disney (NYSE:DIS) shares leapt 6.27% over the previous close, settling at USD 201.91 on 8 March 2021.
Though the parks are unlikely to be fully functional by early April, they can be reopened with capacity limitations, that too only if they fall into the counties not under the most restrictive zones due to COVID-19 transmissions. Under the least restrictive zones, the parks can open with only 25% of capacity.
Walt Disney has also confirmed that all the parks are now entirely booked for the coming week, and Hollywood studios are also not available for this entire month for guests.
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Q1 FY21 Numbers Impacted Due to COVID-19 Restrictions
Clearly, Walt Disney business was adversely impacted by the pandemic-induced restrictions.
During mid-February 2021, the company unveiled its performance card for Q1 FY21. The most significant impact was on the Products segment, Experiences, and Disney Parks.
Here are the financial highlights for Q1 FY21 ended on 2 January 2021:
- Diluted earnings per share (EPS) for the quarter stood at USD 0.02, down 98% from the PCP when it was USD 1.17. When a few items were excluded from the figure, the diluted EPS reached USD 0.32, a decline of 79% from the PCP when it was USD 1.53.
- Revenue stood at USD 16,249 million, compared with USD 20,877 million during the PCP, a decrease of 22%.
During the quarter, the theme parks remained closed or were seen operating at a significantly reduced capacity. Moreover, in some cases, the company had to cancel or shorten the theatrical releases. Walt Disney also faced disruption in content availability and production.
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The company is well-positioned to achieve much success in future, on the back of robust pipeline of high-quality and exceptional content and the upcoming international entertainment offerings, according to CEO Bob Chapek.
The strategic actions are expected to fuel the growth and increase value for shareholders, he added.
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