Key Moments
- Disney’s fiscal first-quarter revenue rose 5% to $26 billion, surpassing the consensus estimate of $25.7 billion.
- The experiences division delivered $10 billion in revenue and 72% of nearly $5 billion in quarterly operating profit.
- Streaming operating income climbed 72% to $450 million on a 13% revenue increase to $4.4 billion.
Theme Parks and Experiences Lead Earnings Beat
Walt Disney Co’s theme parks and the animated sequel “Zootopia 2” lifted results above Wall Street expectations for the holiday quarter ended in December, pushing the stock up 4% in premarket trading on Monday.
The company is anticipated to appoint a new chief executive to succeed Bob Iger early this year. Within Hollywood, Josh D’Amaro, who serves as chairman of the experiences division, is widely viewed as the leading candidate.
The experiences segment – which encompasses Disney’s parks, cruise operations and consumer products – was the standout performer for the December quarter. The unit generated $10 billion in revenue and accounted for 72% of the company’s quarterly operating profit, which totaled nearly $5 billion.
Walt Disney World was a key contributor, benefiting from an easier comparison with the prior year, when Hurricane Milton forced the temporary closure of attractions in the Orlando area.
Financial Performance Versus Expectations
Company-wide revenue increased 5% to $26 billion for Disney’s fiscal first quarter ended December 27. That result exceeded the consensus forecast of $25.7 billion from analysts polled by LSEG. Income before taxes came in at $3.7 billion, topping the Wall Street expectation of $3.5 billion.
Adjusted earnings per share declined to $1.63, a 7% decrease from the prior year, but still ahead of analysts’ projection of $1.57 per share.
| Metric | Result | Analyst Expectation |
|---|---|---|
| Total revenue | $26 billion | $25.7 billion |
| Income before taxes | $3.7 billion | $3.5 billion |
| Adjusted EPS | $1.63 | $1.57 |
Disney reaffirmed its outlook for double-digit growth in per-share earnings for the full year, relative to fiscal 2025. The company projects $19 billion in cash from operations and said it remains on pace to repurchase $7 billion of its stock.
Sports Segment Hit by YouTube TV Dispute
A two-week contract standoff between Disney and YouTube TV, which left millions of subscribers without access to Disney-owned channels such as ESPN, weighed on results in the sports business. The dispute produced a $110 million impact on the sports unit, which posted a 23% decline in operating income for the quarter.
Revenue in the sports division edged up 1% to $4.9 billion. Operating income fell to $191 million, reflecting the fallout from the YouTube licensing issue, higher programming costs and a reduction in regular-season NBA games.
| Sports Segment | Quarterly Result |
|---|---|
| Revenue | $4.9 billion (up 1%) |
| Operating income | $191 million (down 23%) |
| Impact from YouTube TV dispute | $110 million |
Entertainment Division Driven by Blockbusters
The entertainment segment – which includes Disney’s film studios, television networks and streaming platforms – generated $11.6 billion in revenue in the quarter, an increase of 7% from a year earlier.
Results were buoyed by a strong holiday release lineup featuring “Zootopia 2,” which has amassed nearly $1.8 billion in global box office receipts, and “Avatar: Fire and Ash,” which has taken in $1.4 billion worldwide, according to Comscore.
Despite the revenue lift, the entertainment division recorded a 35% year-over-year decline in operating profit. The downturn was attributed in part to marketing expenses for “Avatar” – which debuted in the final week of the quarter – along with eight additional film releases, compared with four titles in the prior-year holiday period. The segment also experienced a $140 million drop in political advertising versus the same quarter a year ago.
Streaming Businesses Show Strong Profit Growth
Disney’s streaming portfolio, which includes Disney+, Hulu and ESPN, delivered a sharp improvement in profitability. Operating income climbed 72% to $450 million. Revenue advanced to $4.4 billion, up 13% from the prior year.
The company no longer discloses subscriber counts for its streaming services.
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