Disney says it's seeing 'higher than expected' cancellations at its theme parks as Florida cases continue to surge

• Disney said Tuesday that Disney World attendance is smaller than expected as Florida coronavirus cases surge.
• Company executives said cancellations were also higher than expected as the state fails to contain its outbreak.
• Overall, reopened parks and an uptick in streaming revenue helped Disney top Wall Street's estimates for the second quarter.

Even at half-capacity, Disney World is making money — not losing it — but that success hinges on Florida's ability to contain its coronavirus outbreak.

Disney executives told investors in a quarterly report that its theme parks were "operating at a positive net contribution level." In other words, they're making more from ticket sales, souvenir shops, restaurants and the likes to offset paying staff and other underlying costs.

"It's worth noting that while Walt Disney World is operating at a positive net contribution level, the upside we are seeing from reopening is less than we'd originally expected given the recent surge in COVID-19 cases in Florida," CFO Christine McCarthy said on a conference call.

But leadership also warned that cancellations were surprisingly high, likely because of the state's surging outbreak.

"What we've seen is that we have roughly 50% of our guest base still traveling from a distance but the other 50% coming from local markets and in-state," CEO Bob Chapek said. "We've also had a higher-than-expected level of cancellations once somebody does make a reservation because as the disease ebbs and flows, they might necessarily cancel."

Florida has reported 58, 273 new coronavirus cases in the past seven days, according to US CDC data, the highest of all 50 states.

Overall, Disney's earnings report topped Wall Street expectations for the quarter largely marred by movie theater, theme park, live sports, and cruise ship shutdowns thanks to a surge in streaming revenue. Shares jumped 11% in trading Wednesday following the results.

Disneyland in California remains the largest park in the company's portfolio that's still closed because of coronavirus restrictions in the state, though "Downtown Disney" shopping and dining is open in Anaheim.

Management is betting on "pent-up demand" to spark more park visits even among Florida locals.

"People haven't been in the parks for a while," McCarthy said. "There's a pent-up demand, and let's not forget that we just opened the full Rise of the Resistance as well as the Star Wars lands fully in the beginning of this calendar year. So you had a lot of people, even Floridians who are just traveling locally, who have not yet had an opportunity to go in and experience that."