Disney (DIS) Stock: Q1 Revenue Hits $26B on Theme Park Strength

TLDR

• Disney beat Wall Street estimates with $26 billion in revenue for the quarter ending December 27, up 5% from last year
• Theme parks drove results with $10 billion in revenue and 72% of total operating profit of nearly $5 billion
• Streaming services saw operating income jump 72% to $450 million, beating analyst expectations
• YouTube TV dispute cost Disney’s sports unit $110 million, leading to a 23% drop in sports operating income
• Company expects to name Bob Iger’s replacement as CEO this week, with Josh D’Amaro considered the front-runner

Disney crushed Wall Street’s expectations for its first fiscal quarter. The company posted $26 billion in revenue for the period ending December 27, topping the $25.7 billion analyst forecast.

The entertainment giant earned $1.63 per share on an adjusted basis. That beat estimates of $1.57 per share, though it marked a 7% decline from the previous year.

Theme parks carried the quarter. The experiences division brought in $10 billion in revenue and generated 72% of Disney’s nearly $5 billion in quarterly operating profit.

The Walt Disney Company, DIS

Walt Disney World saw strong performance compared to last year. Hurricane Milton had forced the Orlando parks to close during the same period in 2024.

Domestic park attendance rose 1% while guest spending per person increased 4%. The cruise line also performed well after adding a new ship to its fleet.

Streaming Profits Surge Past Expectations

Disney’s streaming business delivered a standout performance. Operating income for Disney+ and Hulu jumped 72% to $450 million, well above Wall Street’s projections.

CFO Hugh Johnston credited strong viewership of older titles like “Avatar” and “Zootopia” whose sequels released in 2025. ABC’s “High Potential” also drew viewers.

Lower cancellation rates helped the bottom line. Customers who bundled Disney+ and Hulu with the new ESPN streaming service stuck around.

The company stopped reporting subscriber numbers. It now focuses on profitability over subscriber growth.

Sports Division Takes a Hit

The sports unit struggled during the quarter. Operating income fell 23% to $191 million on revenue of $4.9 billion, up just 1%.

A YouTube TV blackout cost Disney $110 million. The two companies battled over rates for 15 days, blocking millions of subscribers from ESPN and other Disney networks.

Higher programming costs and fewer NBA regular-season games also weighed on results. The sports division faces ongoing challenges as the industry shifts.

Traditional television continues its decline. Nonstreaming entertainment operating income dropped 55% to $650 million as cord-cutting accelerates.

Box Office Strength Can’t Offset Marketing Costs

The entertainment unit posted $11.6 billion in revenue, up 7% from last year. “Zootopia 2” has brought in nearly $1.8 billion worldwide.

“Avatar: Fire and Ash” added $1.4 billion in global ticket sales. The theatrical slate drove strong performance during the holiday season.

But operating profit in entertainment fell 35%. Disney marketed nine films this holiday season compared to just four the previous year.

“Avatar” marketing costs hit hard since the film released in the final week of the quarter. Political advertising also declined $140 million year-over-year.

Disney reaffirmed its full-year outlook. The company expects double-digit earnings growth per share and $19 billion in cash from operations.

Share buybacks remain on track at $7 billion. Disney shares dipped about 2% in premarket trading Monday.

The company warned that international tourism is slowing at U.S. parks. Disney plans to shift more marketing toward domestic visitors at Disneyland and Walt Disney World.

The board meets this week to select Iger’s successor. Experiences chairman Josh D’Amaro is widely viewed as the leading candidate, with entertainment co-chairman Dana Walden also in contention.

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