TLDR
- Disney reported $26 billion in Q1 revenue, beating the $25.7 billion analyst forecast by 1.2%
- Theme parks generated $10 billion in revenue and accounted for 72% of quarterly operating profit
- Streaming income climbed 72% to $450 million, exceeding Wall Street projections
- A YouTube TV blackout cost the sports division $110 million in lost revenue
- CEO succession decision expected this week with Josh D’Amaro as the likely choice
Disney delivered better-than-expected results for its first fiscal quarter. Revenue reached $26 billion for the period ending December 27, surpassing analyst estimates.
Earnings came in at $1.63 per share on an adjusted basis. That topped the $1.57 consensus forecast despite a 7% year-over-year decline.
The experiences division powered the quarter. Theme parks, cruises, and consumer products brought in $10 billion and contributed 72% of the company’s $5 billion operating profit.
Walt Disney World benefited from easier comparisons. Hurricane Milton shut down the Orlando parks during the same quarter last year.
Attendance at domestic parks increased 1%. Per-guest spending jumped 4% as visitors opened their wallets wider.
Streaming Business Hits Profitability Milestone
Disney’s direct-to-consumer services exceeded expectations. Operating income for Disney+ and Hulu soared 72% to $450 million.
Older catalog content drove viewership. “Avatar” and “Zootopia” attracted subscribers ahead of their 2025 sequel releases.
Bundle subscribers stayed loyal. Customers who combined Disney+, Hulu, and ESPN showed lower cancellation rates.
The company no longer discloses subscriber counts. Management now prioritizes profit over subscriber additions.
Traditional television continues bleeding. Nonstreaming entertainment operating income collapsed 55% to $650 million as cord-cutting persists.
YouTube Dispute Hammers Sports Unit
The sports division took a beating. Operating income dropped 23% to $191 million on flat revenue of $4.9 billion.
A 15-day YouTube TV blackout delivered a $110 million blow. Millions of subscribers lost access to ESPN and other Disney channels during the contract dispute.
Higher programming expenses added pressure. Fewer NBA regular-season games also contributed to the decline.
Box Office Wins Can’t Offset Marketing Spend
Entertainment revenue grew 7% to $11.6 billion. “Zootopia 2” has collected nearly $1.8 billion in worldwide box office receipts.
“Avatar: Fire and Ash” generated $1.4 billion globally. The holiday slate performed well at theaters.
Operating profit fell 35% in entertainment. Disney marketed nine films this season versus four last year.
Late-quarter “Avatar” marketing expenses hit results hard. Political advertising revenue also declined $140 million.
Disney maintained its full-year guidance. The company projects double-digit earnings growth and $19 billion in operating cash flow.
Stock buybacks remain at $7 billion. Shares declined roughly 2% in premarket trading Monday.
Management flagged slowing international tourism at U.S. parks. Marketing efforts will shift toward domestic visitors at both coasts.
The board convenes this week for CEO succession. Josh D’Amaro leads the race, with Dana Walden as the other top contender.
Disney reaffirmed expectations for modest experiences growth in the current quarter. International headwinds at domestic parks present near-term challenges.
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