Canada markets closed

Disney (DIS) Hit Hard by COVID Quarter; Plus EA, ATVI, BYND & More

Mark Vickery

The Walt Disney Company DIS posted disappointing fiscal Q2 2020 earnings data after Tuesday’a closing bell. Earnings of 60 cents per share was well beneath the 83 cents in the Zacks consensus, as well as the $1.61 per share reported in the year-ago quarter. Revenues of $18.01 billion marginally missed the $18.03 billion our analysts were expecting.

Of course, this wasn’t just any ordinary March quarter for Disney — the “shelter at home” initiatives to thwart the global spread of coronavirus cost the company an estimated $1 billion in quarterly operating income. Revenue losses from closures — Parks were down 58% in the quarter — as well as a loss of ad revenue, lower Direct-to-Consumer business, lost revenue from a lack of sporting events, and Studio revenues taking a hit from the closure of movie cinemas all contributed to a very tough quarter.

Disney’s stock had already baked much of this in, however; shares had already tumbled 46.6% year to date. Immediately following the earnings release, shares rose 1.4%. This marks the second earnings miss in the past 4 quarters for the entertainment giant, and the fourth time it has posted a negative bottom-line surprise in the past 12 quarters.

Activision Blizzard ATVI and Electronic Arts EA also reported quarterly earnings late Tuesday, sending each stock in different directions after the releases. Both companies posted big revenue beats in the quarter and increased next-quarter sales guidance. Yet EA is seeing a 2%+ drop after the report, while Activision rose 5%. Double-digit growth for Candy Crush and strength in its Call of Duty franchise may have put the company over the top. Both companies have seen their stocks rise more than 10% year to date.

Beyond Meat BYND swung to a positive earnings number to 3 cents per share, from the -6 cents expected and the -$0.14 per share reported in the year-ago quarter. Revenues of $97 million rose a very impressive 141% year over year, with both Retail and Food Service businesses experiencing robust growth. The company has eliminated reporting guidance for the upcoming quarters, however; the coronavirus pandemic is likely throwing a wrench into Beyond’s huge success story to this point.

Pinterest PINS posted mixed results in its Q1 report Tuesday afternoon, with -$0.10 per share missing the Zacks consensus by 2 cents, though still representing a notable improvement from the year-ago -$0.32 per share. Revenues, on the other hand, of $272 million topped expectations of $270.5 million, with Monthly Active Users (MAU) hitting a higher-than-expected 367 million in the quarter. Yet shares are being hit hard in late trading, down 9.3%, as the company noted the coronavirus environment is likely to put pressure on margins. The company did not release new guidance.

Just Released: 5 Stocks Set to Double

Four Zacks experts each announce their single favorite pick with potential to gain +100% and more in the months ahead. Today, download the private Special Report that names these stocks and spotlights why their upside is so exceptional.

See Stocks Now >>

Click to get this free report Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Electronic Arts Inc. (EA) : Free Stock Analysis Report Pinterest, Inc. (PINS) : Free Stock Analysis Report Beyond Meat, Inc. (BYND) : Free Stock Analysis Report To read this article on click here. Zacks Investment Research