Theme Parks Power Financial Performance
Disney’s theme parks and cruise operations propelled the company to exceed Wall Street expectations in its latest quarterly earnings report. The experiences division generated $10 billion in revenue during the holiday quarter ending December, accounting for 72% of the company’s $5 billion operating profit.
Walt Disney World saw particularly strong performance compared to the previous year when hurricane-related closures impacted operations. The company’s overall revenue increased 5% year-over-year to $26 billion, surpassing analyst projections of $25.7 billion.
Financial Highlights and Forecasts
The entertainment giant reported pretax income of $3.7 billion, exceeding market expectations of $3.5 billion. Adjusted earnings per share reached $1.63, outperforming the $1.57 consensus estimate despite a 7% decline from the previous year.
Company leadership reaffirmed full-year guidance predicting double-digit earnings per share growth compared to fiscal 2025 projections. Disney anticipates $19 billion in operational cash flow and plans to repurchase $7 billion in stock this year.
Leadership Transition and Divisional Performance
Industry observers indicate Josh D’Amaro, current chairman of Disney’s experiences division, has emerged as the leading candidate to succeed CEO Bob Iger. The anticipated leadership change is expected to be finalized in coming months.
Entertainment and Streaming Results
The entertainment unit posted $11.6 billion in quarterly revenue, a 7% increase driven by successful theatrical releases. Zootopia 2 generated nearly $1.8 billion in global box office sales, while Avatar: Fire and Ash added $1.4 billion according to box office data.
Disney’s streaming services, including Disney+ and Hulu, reported a 72% surge in operating income to $450 million. Streaming revenue grew 13% to $4.4 billion, though the company has discontinued subscriber number disclosures.
Sports Division Challenges
The sports unit faced headwinds from a two-week carriage dispute with YouTube TV that blocked access to ESPN and other Disney networks. This disruption contributed to a 23% decline in operating income, with the division reporting $191 million in quarterly profits on $4.9 billion revenue.
Increased programming costs and fewer NBA regular-season games further impacted the sports division’s performance. The unit also experienced a $140 million reduction in political advertising revenue compared to the previous year.
