Disney Beats Q1 Expectations, Eyes First Earnings Call Under New CEO
Walt Disney Co. reported fiscal first-quarter revenue and earnings that exceeded analyst expectations, driven primarily by its theme parks, resorts, and cruises segment. Separately, the company is preparing to release its fiscal second-quarter results in its first earnings call under new CEO Josh D'Amaro.
Fiscal First Quarter Results (Ended December 27)
Key Financial Metrics
- Adjusted earnings per share: $1.63 (vs. $1.57 expected)
- Revenue: $25.98 billion (vs. $25.74 billion expected)
- Net income: $2.48 billion ($1.34 per share), a decrease from $2.64 billion ($1.40 per share) in the prior year
- Overall revenue growth: 5% year-over-year, reaching approximately $26 billion
"The experiences unit (theme parks, resorts, and cruises) achieved over $10 billion in quarterly revenue for the first time."
Segment Performance
- The experiences unit (theme parks, resorts, and cruises) achieved over $10 billion in quarterly revenue for the first time.
- Domestic theme parks generated $6.91 billion in revenue, a 7% increase year-over-year.
- International parks generated $1.75 billion in revenue, also a 7% increase year-over-year.
- Domestic parks saw a rise in attendance, while international visitation was described as softer.
Fiscal 2026 Outlook
- Disney anticipates repurchasing $7 billion in stock.
- The company projects double-digit growth in adjusted earnings per share.
- It expects to generate $19 billion in cash from operations.
Fiscal Second Quarter Projections
- The streaming unit (Disney+ and Hulu) is projected to reach approximately $500 million in operating income, an increase of about $200 million compared to the same period last year.
- The experiences unit is expected to see "modest" operating income growth, due to international visitation headwinds at domestic parks.
Leadership Transition
- Josh D'Amaro became CEO of Disney in March, replacing Bob Iger.
- This will be his first earnings call since assuming the role.
- D'Amaro previously led Disney's parks and experiences division.
"According to LSEG, analysts expect earnings per share of $1.49 and revenue of $24.78 billion."
Upcoming Fiscal Second Quarter Results
- Disney will release its fiscal second-quarter results before the stock market opens on Wednesday.
- According to LSEG, analysts expect earnings per share of $1.49 and revenue of $24.78 billion.
Company Developments
- Disney has conducted layoffs and faced political pressure related to late-night host Jimmy Kimmel.
- The company has stopped reporting certain segment details, including revenue and operating income breakdowns for entertainment, and quarterly streaming subscriber numbers.
Industry Context
- The shift from pay TV bundles to streaming has reduced advertising and distribution profits.
- Traditional TV remains profitable, but investors are focused on streaming growth compensating for declines in linear TV.
- According to Forrester analyst Mike Proulx, the earnings call serves as a test of whether D'Amaro's parks background translates to other areas of the business. He noted that streaming remains the primary focus, but industry consolidation could affect Disney+.
External Factors
- Management's February guidance for the experiences unit was issued before recent U.S. and Israeli attacks on Iran, which led to a surge in oil prices.
This story is developing.