3 Questions Disney Needs to Answer This Week

The world’s most prolific entertainment company is getting ready to prove that it’s more than just a Mickey Mouse company. Walt Disney’s (NYSE:DIS) reports shortly after Tuesday’s market close, and there’s a lot going on these days with the market bellwether.

Let’s go over some of the questions that Disney may be asked on Tuesday. Let’s also size up the likely answers.

1How much money are its theme parks losing?

Disney’s theme parks have been opening across the world over the past three months. It’s just the original Disneyland in California that has yet to reopen. Hong Kong Disneyland temporarily closed down last month after an uptick in COVID-19 cases.Safety was the paramount concern going into the resumed operations of its gated attractions, and Disney has aced that test with flying colors. Media sources would’ve let you know by now if Disney parks were a hotbed for contagion.

The concern now shifts to the profitability of the operations, as that’s the ultimate test of sustainability. Right now it doesn’t seem as if Disney’s in the black with its theme park segment. The tight capacity limits on daily attendance, travel restrictions, and general pandemic concerns are weighing on the business. However, making money right now isn’t the prime objective.

“We are still doing better financially than if we were closed,” Disney rival Comcast (NASDAQ:CMCS.A) said about its Universal Studios theme parks in Florida and Japan during last week’s earnings call.

Comcast lost a lot of money at its resorts in the second quarter, but the point is that it would be losing even more money if it wasn’t open. Comcast is able to carve out a better outcome in a challenging climate, and creating jobs for employees and escapism opportunities for customers has some altruistic shine there, too. Let’s see if Disney can say that same thing about its early restart efforts.

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