Disney’s latest quarterly earnings report has exceeded analyst expectations, marking a significant milestone driven primarily by its theme parks, resorts, and cruises segment. For the first time, the experiences unit surpassed $10 billion in quarterly revenue, as revealed by CFO Hugh Johnston during his discussion with CNBC.
The domestic theme parks alone generated an impressive $6.91 billion, while international parks contributed $1.75 billion—both figures representing a 7% increase from the same period the year before. Johnston noted that although attendance at domestic parks saw an upswing, international visitation experienced softness.
In the fiscal first quarter ending December 27, Disney reported the following results in contrast to Wall Street projections, according to data from LSEG:
- Earnings per share: Adjusted at $1.63, beating the expected $1.57.
- Revenue: Totaled $25.98 billion, exceeding the forecast of $25.74 billion.
- Net income: Came in at $2.48 billion, or $1.34 per share, down from $2.64 billion, or $1.40 per share, in the same quarter of the previous year. On an adjusted basis—accounting for one-time items including tax charges linked to a deal with Fubo—Disney’s earnings were reported at $1.63 per share.
Overall, the company experienced a 5% revenue growth year-over-year, reaching close to $26 billion. Looking ahead to fiscal 2026, Disney announced plans for a $7 billion stock repurchase and anticipates double-digit growth in adjusted earnings per share, alongside $19 billion projected in operational cash flow.
For the upcoming fiscal second quarter, Disney’s streaming unit, which includes Disney+ and Hulu, is anticipated to generate around $500 million in operating income, reflecting a $200 million increase compared to the previous year. However, the experiences unit is expected to see only “modest” growth in operating income due to challenges related to international visitation, costs associated with the launch of a new Disney Cruise line, and expenses for the “World of Frozen” attraction set to open at Disneyland Paris.
Amid this financial reporting, speculation continues regarding the successor to CEO Bob Iger. Disney is in the process of selecting Iger’s successor for the second time; he previously named Bob Chapek as CEO in 2020, only to replace him in 2022 after a significant decline in the company’s stock value. Johnston expressed optimism about the future direction of the company, stating that improvements in parks, streaming profitability, and theatrical success bode well for the new CEO.
Disney’s board is meeting this week to consider naming Iger’s successor, with insiders suggesting that the announcement could arrive within the first quarter of the year. Two prominent candidates are Josh D’Amaro, chairman of Disney Experiences, and Dana Walden, co-chairman of Disney Entertainment, with D’Amaro currently overseeing the company’s profit-driving sector.
In terms of operational performance, the experiences division reported threefold operating income compared to the entertainment division, with profits totaling $3.31 billion—a 6% increase from the prior year. Conversely, the entertainment division has faced challenges, particularly due to declining revenues from traditional TV networks, registering an operating income of just $1.1 billion—down 35% year-over-year.
The entertainment segment encompasses both streaming services and theatrical releases, generating $11.61 billion in revenue, a 7% increase driven by rising subscription fees and the recently concluded Fubo deal, in which Disney acquired a 70% stake.
Disney also noted a rebound in its theatrical segment, which benefitted from strong performances including “Zootopia 2” and installments from the “Avatar” and “Predator” franchises. Notably, this quarter introduced changes in how Disney reports its streaming and entertainment data, no longer detailing revenue breakdowns for linear TV networks or subscription figures, following a trend initiated by Netflix.
In the streaming sector, revenue increased by 11% to $5.35 billion in the fiscal first quarter. Recent strategic adjustments include the launch of ESPN’s direct-to-consumer platform and the ongoing integration of Hulu into Disney+. The company has now distinctively categorized ESPN in a separate sports segment, which saw revenue rise by 1% to $4.91 billion, though operating income fell by 23% to $191 million due to heightened programming costs and a reduction in subscription fees tied to the loss of traditional cable bundle subscribers. Advertising revenue increased, but the sports unit also faced impacts from a temporary blackout of Disney’s networks on YouTube TV, estimated to have cost the company about $110 million in operating income.
