This has been a brutal year on many fronts, but when it comes to Walt Disney (NYSE:DIS), there's finally a light at the end of the fiscal 2020 tunnel. The media giant's fiscal year ends next week, and come early November, Disney will announce its results for the fiscal fourth quarter.

The report itself won't be pretty but should offer improvement over the vicious 42% decline in revenue that it posted last month for its fiscal third quarter. After all, the current quarter is the period when Disney World reopened, sports programming returned to ESPN, and movie theaters across the country started firing up their projectors again.

However, reality has been uninspiring on all fronts, so it's not a surprise to see analysts and investors taking a more cautious stance on how long the turnaround will actually take to happen. The current quarter will be problematic, too -- and fiscal 2021 can't start soon enough for Disney. 

Alice in Wonderland with Mad Hatter and Rabbit in front of the Mad Tea Party ride at Disney World's Magic Kingdom.

Image source: Disney.

A world of tears

Needham analyst Laura Martin -- who has a neutral rating on Disney -- slashed her forecast for the fiscal fourth quarter that comes to a close next week. She's lowering her revenue target by 26% to $14.6 billion for the quarter. She's also roughly doubling her projected loss to $0.69 a share. 

Martin isn't alone. A lot of analysts have been whittling down their once-rosier targets for the current quarter. Her new forecast for a $0.69-a-share deficit is exactly the industry average right now on Disney. The $14.6 billion she's now looking for on the top line is actually a hair above the market's $14.5 billion consensus. Wall Street pros see revenue declining 24% since last year's fiscal fourth-quarter showing, but it also represents a 23% sequential advance.

The real dagger here is the bottom line, as even during the otherwise pitiful fiscal third quarter, Disney managed to squeeze out a tiny profit of $0.08 a share on an adjusted basis. Disney's domestic theme parks were closed, and there were no theatrical releases, but the company's margins held up, thanks to the lack of sports programming costs and the general efficiency of its media-networks business. 

In reducing her forecast, Needham's Martin points to the continuing negative impact of COVID-19 on many of its businesses. This is a great time to be a sports fan, with the NFL and Major League Baseball seasons taking place at the same time as the NBA and NHL playoffs, but that also means that all of the money that Disney's ABC and ESPN didn't have to pay in the fiscal third quarter are due now.

Disney has said that its theme parks aren't losing as much money as they would if they were closed, but this business will be running in the red for a long time. Disney+ is driving strong subscription growth at the expense of near-term profitability. Its studio entertainment segment is trying to figure out the lesser of two evils between box office premieres and premium streaming.

In short, the fourth quarter will definitely show sequential improvement in revenue, but its cost structure is going to be considerably heavier this time around. Most analysts expect the losses to continue into the new quarter, but every Wall Street pro sees Disney returning to profitability for the entire fiscal 2021 that starts next week. The media-stock bellwether is going to have to clear a lot of hurdles before its truly back, but crossing the finish line of fiscal 2020 next week is the only way to get running again in fiscal 2021. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.