A statue of Walt Disney and Mickey Mouse stands in a backyard in entrance of Cinderella’s Fortress on the Magic Kingdom Park at Walt Disney World on Could 31, 2024, in Orlando, Florida.
Gary Hershorn | Corbis Information | Getty Photos
Disney reported fiscal fourth-quarter earnings on Thursday that topped analyst expectations for earnings however missed on income as the corporate’s leisure enterprise was weighed down by its TV networks and a lackluster theatrical movie slate.
Disney inventory fell roughly 8% in early buying and selling Thursday.
Here’s what Disney reported for the interval ended Sept. 27, in contrast with what Wall Road anticipated, in keeping with LSEG:
- Earnings per share: $1.11 adjusted vs. $1.05 anticipated
- Income: $22.46 billion vs. $22.75 billion anticipated
Web earnings for the quarter was $1.44 billion, or 73 cents a share, greater than double the $564 million, or 25 cents per share, that Disney reported in the identical interval a yr earlier. Adjusting for one-time objects Disney reported earnings per share of $1.11.
The corporate’s total income for the quarter was almost $22.5 billion, barely lower than the identical quarter final yr.
Disney additionally stated it plans to spice up its dividend and double its share buyback plan for fiscal 2026.
“Total we’re leaving the yr with loads of momentum,” Disney CFO Hugh Johnston informed CNBC’s “Squawk Field” on Thursday concerning the corporate’s streaming and experiences companies.
Streaming strides, linear struggles
Income for Disney’s leisure unit fell 6% from final yr to $10.21 billion, dragged down by the linear TV networks and theatrical releases.
Disney’s TV networks, together with ESPN, have been unavailable for patrons of Google‘s YouTube TV, a streaming supplier of the pay TV bundle since Oct. 31 due to an ongoing carriage dispute between the 2 firms.
Johnston informed “Squawk Field” on Thursday that Disney continues to be within the midst of negotiations with YouTube TV, however the firm was ready for what it anticipated to be a “difficult battle,” and Disney is “able to go so long as they wish to.”
“We’re attempting actually onerous, as I stated, working tirelessly, to shut this deal, and we’re hopeful that we’ll give you the option to take action on a well timed sufficient foundation to at the very least give shoppers the chance to entry our content material over their platform,” CEO Bob Iger stated on Thursday’s name with traders.
Promoting income for the networks, which incorporates broadcast community ABC and pay TV channels like FX, additionally suffered. A part of this was attributable to decrease political promoting, or a $40 million influence in contrast with the identical quarter final yr, Disney stated. The corporate additionally famous that its 2024 three way partnership deal for India Hotstar impacted its linear community outcomes.
Streaming remained the brilliant spot within the enterprise as shoppers continued to show away from the pay TV bundle. Working earnings for the linear networks dropped 21% to $391 million whereas it rose 39%, to $352 million, for streaming. The upper working earnings for streaming occurred as costs elevated for Disney’s streaming companies.
Iger on Thursday stated the streaming enterprise reported one other quarter of profitability development. He added full-year working earnings was $1.3 billion, “up $1.2 billion from final yr and $300 million forward of our authentic steering.”
“This can be a vital achievement when you think about that simply three years in the past our [streaming] enterprise was working a $4 billion working loss,” Iger stated.
Disney+ was launched in 2019, and much like its friends, took some years of losses earlier than hitting profitability.
Disney’s streaming development was additionally the results of extra choices for its companies. Earlier this yr its carriage deal with Constitution Communications broadened, giving the cable TV supplier’s prospects entry to ad-supported Hulu. Initially, Constitution’s pay TV prospects had been receiving solely Disney+.
Whereas about half of the streaming subscriber enhance may very well be attributed to the Constitution carriage deal, Johnston stated on CNBC that “the opposite half was retail,” with an enormous portion of that coming from worldwide markets. Disney — like its media friends Warner Bros. Discovery and Netflix — has seen most of its latest streaming development come from world prospects.
The ESPN app mascot on the New York Inventory Alternate on Aug. 21, 2025.
NYSE
The corporate in August additionally launched its ESPN direct-to-consumer app, which mirrors all of the content material of the TV networks, ESPN+ and different additions. The app can also be obtainable for Constitution’s pay TV subscribers.
On Thursday’s investor name, Iger stated the brand new ESPN app helped to draw new customers, and stated the speed of these with entry via pay TV subscriptions utilizing the app “has been very, very encouraging.” He additionally stated they have been attracting each extra promoting and new advertisers to the ESPN app.
“I feel it is a very constructive step for the way forward for ESPN as a result of whereas nothing essentially gives future proof ideas or circumstances for a enterprise that’s always altering, this actually is a step within the route of solidifying ESPN’s future going ahead,” Iger stated Thursday.
ESPN’s earnings are reported within the sports activities phase, separate from the remainder of its TV channels. Regardless of the continued pay TV bundle buyer defections, sports activities has remained the final bastion of excessive viewership and large promoting {dollars} on conventional TV.
Disney stopped reporting subscriber metrics for ESPN+, and didn’t give steering on the newly launched app that goes by the identical title because the TV community. Johnston on CNBC Thursday stated the supply of ESPN through streaming has helped to stem buyer losses and has additionally boosted engagement with ESPN.
Nevertheless, Johnston stated Disney’s bundles are a driver of the ESPN app and streaming typically.
“One of many issues I feel we’re most enthusiastic about is absolutely 80% of these new retail subs on ESPN are literally bundled subs, which once more, ought to contribute to engagement, ought to contribute to retention, and admittedly make the service extra worthwhile over time,” Johnston informed “Squawk Field.”
The flagship streaming service Disney+ added 3.8 million paid subscribers, bringing its whole to 131.6 million, whereas Hulu had 64.1 million prospects. Disney has been within the strategy of integrating Hulu — which it took full management of earlier this yr — into the Disney+ app.
This marks the final time the corporate will report subscriber numbers and the typical income per unit, or ARPU, for its streaming companies, which incorporates Disney+ and Hulu.
As a substitute, Disney will observe within the footsteps of streaming behemoth Netflix, which earlier this yr stopped updating traders on its subscriber depend.
Income for Disney’s sports activities division, specifically ESPN, was up 3% to roughly $4 billion, whereas working earnings was basically flat at $898 million compared with the identical interval final yr. ESPN’s home working earnings specifically decreased attributable to prices related to the launch of the app in August, in addition to increased programming prices.
Constructive experiences
Disney Cruise Line’s Disney Dream is seen docked in Port Canaveral, Florida, on July 30, 2021. (Joe Burbank/Orlando Sentinel/Tribune Information Service through Getty Photos)
Mark Gauert | Solar Sentinel | Getty Photos
Income for the experiences phase, which consists of theme parks, resorts and cruises, in addition to shopper merchandise, rose 6% to $8.77 billion. Working earnings for the phase was up 13% to $1.88 billion.
The present financial system hasn’t affected the Disney shopper on the subject of its experiences enterprise, Johnston stated Thursday on “Squawk Field.” He famous that bookings are up 3% and spending per particular person at parks was additionally up 5% in Disney’s fiscal first quarter.
“We have got continued momentum there,” Johnston stated.
Disney attributed the features in its experiences and parks phase to development in its cruise enterprise, regardless of being offset by increased fleet enlargement prices.
Johnston famous cruises are promoting out on the similar price that they’d earlier than, despite the fact that the fleet is larger. “In order that added capability is filling up rapidly,” he added.
Disney’s expanded cruise fleet was highlighted on its Thursday name with traders. Two upcoming ships will be a part of Disney’s fleet within the close to future, Iger stated Thursday, with Disney Future setting sail this month and Disney Journey, the primary ship ported in Asia, set to launch in March.
Johnston added extra concerning the experiences enterprise on Thursday’s name with traders.
“That is not a disclosed merchandise, however clearly it is a very enticing enterprise,” Johnston stated concerning the margins on the cruises phase. “We’re able to pricing it at a very good stage. The visitor satisfaction scores are increased than mainly the rest within the firm, so the margins in that enterprise, as you’d think about, are fairly enticing.”
Income for Disney’s home parks was up 6% to $5.86 billion, whereas worldwide parks income elevated 10% to $1.74 billion. Disney famous that the working outcomes for Disney’s worldwide parks have been boosted by development at Disneyland Paris.
Johnston stated on Thursday’s name that demand for Disney’s U.S. parks was in step with expectations, as the corporate had earlier factored within the opening of Comcast‘s Epic Universe in Florida this yr. Nevertheless, Johnston stated Epic Universe “gave the impression to be impacting the remainder of the competitors in Florida greater than it is impacting us.”
Disclosure: Comcast is the dad or mum firm of NBCUniversal and CNBC.