COMPANY NEWS IN BRIEF

06 August 2020 | Business

Disney takes US$5 billion hit

Walt Disney Co avoided the unmitigated disaster some investors feared as it eked out an adjusted profit amid the coronavirus pandemic that shut down parks, movie theatres and sporting events across the globe.

Disney's quarterly profit of 8 cents per share on an adjusted basis beat expectation for a loss of 64 cents, sending the stock up 5% in after-market trade.

The company took a nearly US$5 billion charge due to the pandemic and shifting media habits. Covid-19 wiped out US$3.5 billion in operating profit in the park’s division.

"The majority of businesses worldwide have experienced unprecedented disruption as a result of the pandemic," Disney chief executive Bob Chapek told analysts. "Most of our businesses were shut down, and this had a huge impact."

Investors overlooked total revenue that fell short of expectations by nearly US$600 million and focused on divisions including parks and its media networks with revenue declines that were not as bad as expected. – Nampa/Reuters

Nintendo posts bumper profit

Japan's Nintendo Co Ltd is expected to post a 160% jump in first-quarter operating profit as its hit Switch console and titles like Animal Crossing.

The escapist island life simulator became a major hit as its delayed release coincided with consumers staying home due to the coronavirus outbreak, boosting the gaming firm's earnings in a year with a thin pipeline for major Switch titles.

In what is normally a lean quarter, Nintendo is seen posting an April-June profit surge at 71 billion yen (US$670 million), according to Refinitiv SmartEstimate, based on the estimates of 12 analysts. That would compare with 27.4 billion yen a year earlier.

Sales of Animal Crossing likely reached 8 million units in the quarter, said Citigroup analyst Kota Ezawa, who sees total sales for the title reaching 20 million units.

Momentum for the Kyoto-based gaming firm, whose shares hit a 12 year high in July, is being tempered by worldwide shortages of the hybrid home or portable Switch and portable-only Switch Lite. - Nampa/Reuters

Beyond Meat racks up high

Beyond Meat Inc's quarterly results showed that the plant-based burger maker spent more than expected on dealing with the fallout of weak demand from restaurants, sending shares down about 7% after the bell.

El Segundo, California-based Beyond Meat typically gets about half its global sales from restaurants, many of which closed stores and limited menus during the quarter due to Covid-19.

But as fast-food orders slumped, demand from grocery shoppers on lockdown surged and Beyond Meat had to spend nearly US$6 million to reroute products to retailers like Walmart and Costco.

"We had to figure out how to continue to grow in an environment where half our business, essentially, deteriorated," chief executive Ethan Brown said.

Sales fell nearly 61% at the company's US food service business, which supplies plant-based patties, chicken and sausages to fast-food chains like KFC and Dunkin Brands. Revenue from international restaurants more than halved to US$7.2 million.

Beyond Meat repurposed a "meaningful" amount of inventory that was previously intended for fast-food chains. – Nampa/Reuters

Pioneer posts cost cuts

Pioneer Natural Resources Co posted a quarterly loss that was smaller than estimates, as the US shale producer reined in costs to cushion a blow from the coronavirus-induced plunge in oil prices.

The company said it cut costs and expenses by more than a third as prices for its oil and gas tumbled 55.2% to $17.61 per barrel of oil equivalent.

The Permian basin producer's average sales volume rose to 374 563 barrels of oil equivalent per day (boepd) in the second quarter, from 334 167 boepd a year earlier.

Pioneer also raised its full-year production forecast to between 356 000 boepd and 371 000 boepd after cutting it in May, joining an expanding list of US producers restoring some of their shut-in drilling.

Still, the company expects about 6 000 barrels of oil per day (bopd) production to remain curtailed in the current commodity price environment. Pioneer had reduced about 7 000 bopd of net production during the second quarter. – Nampa/Reuters

Match forecasts sales

Match Group Inc forecast current-quarter sales above Wall Street expectations after beating quarterly estimates, as demand for its online dating app Tinder rebounded during the coronavirus lockdowns.

Tinder added about 200 000 users in the second quarter, taking its average subscribers to 6.2 million, as restrictions to stop the spread of the pandemic limited face-to-face meetings and encouraged more people to use dating apps as an alternative.

The numbers also allayed investor concerns over slowing growth at the company's flagship product, sending shares 3.2% higher after the bell.

"Despite the pandemic, our user trends like engagement and willingness to pay for our products is up," chief executive officer Shar Dubey said.

Match had revamped its video calling feature to boost usage during lockdowns and also offered free access to the "Passport" feature on Tinder, which allows users to virtually change their location and match with people across the world. – Nampa/Reuters

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