Walt Disney has exceeded Wall Street's quarterly earnings forecasts, driven by strong growth in its streaming services and theme parks. The entertainment giant reported adjusted earnings per share of $25.2 billion for the January-to-March period, surpassing analysts' average revenue expectations of $24.78 billion, according to LSEG data. Following the announcement, Disney's shares jumped over 4% in premarket trading.
New Chief Executive Josh D'Amaro, who succeeded Bob Iger in mid-March, reaffirmed that the company anticipates accelerated growth in the second half of the fiscal year. In a letter to shareholders, he projected adjusted EPS growth for fiscal 2026 of approximately 12%, an upgrade from the earlier 'double digits' forecast, and reiterated expectations for double-digit adjusted EPS growth in fiscal 2027.
The Experiences division, which includes parks, cruise ships, and consumer products, reported a 5% increase in operating income for the quarter, fuelled by higher guest spending at US theme parks in Florida and California, as well as increased cruise-ship volume. The Entertainment unit saw its operating income rise by 6% to $1.34 billion, partly due to stronger subscription and advertising revenue from streaming services like Disney+, and box-office successes such as 'Zootopia 2' and 'Avatar: Fire and Ash'.
However, the Sports division, home to ESPN, experienced a 5% decrease in operating income to $652 million, attributed to higher sports rights and production costs. Despite this, D'Amaro outlined plans to invest significantly in entertainment content and enhance theme park experiences, leveraging technology to boost revenue from storytelling initiatives. He acknowledged 'macroeconomic uncertainty' but noted the 'healthy' current demand at Disney's US theme parks.
