Disney posts 4Q loss as parks business, costs drag results

Walt Disney Co. reported fiscal fourth-quarter loss on Thursday thanks largely to changes related to the COVID-19 pandemic. Its earnings were dragged by costs from restructuring related to its streaming services and lost revenue from its California theme parks, which remain closed amid surging coronavirus cases in the U.S.

But its results weren't as bad as feared and the company's shares advanced after hours.

Before the pandemic, Disney's profit soared as its wide array of media and entertainment offerings, from Marvel theatrical releases to Disney cruises, outperformed. But those businesses have been among the hardest hit during a pandemic that shows no sign of going away.

Even before the pandemic, Disney had been increasingly focused on its streaming services such as Disney Plus, which launched a year ago and now boasts 73.7 million subscribers, surpassing analysts' and the company's own expectations. That move has been vastly sped up by the pandemic, as well as increasing competition from new streaming services such as NBCUniversal’s Peacock and WarnerMedia’s HBO Max, not to mention older rivals like Netflix.

In October, Disney announced a restructuring of its business units to put streaming front and center. It created three content arms, one each for sports, general entertainment and its studios, which have famous brands including Star Wars and Marvel. Their primary focus is on making shows and movies for streaming services. Meanwhile, a new distribution group will centralize how the content is sold and oversee streaming operations.

Disney Plus has boomed during the pandemic. Subscribers to Disney's main streaming bundle — Disney Plus, ESPN Plus and Hulu — top 120 million. It still plans to launch another international streaming service called Star. Disney has also been pivoting to releasing major...