Disney Shares Take a Dive Despite Streaming Success
Walt Disney shares took a significant hit, falling over 8% on Thursday following the release of mixed fourth-quarter results. Despite surpassing earnings expectations, the company fell short on revenue due to ongoing declines in their traditional TV business.
Disney reported adjusted earnings of $1.11 per share, outperforming the estimated $1.05. However, the revenue of $22.46 billion didn’t meet the anticipated $22.83 billion consensus. The shortfall in revenue was primarily due to a 6% decline in the entertainment division. Linear network revenue saw a 16% drop year-over-year as cord-cutting trends accelerated and advertising spending shifted towards streaming platforms.
On a brighter note, Disney’s streaming business demonstrated strong momentum. Disney+ added 3.8 million subscribers in the quarter, bringing the total to 131.6 million subscribers. The direct-to-consumer segment reported an operating income of $352 million, a 39% increase from the prior year. This growth was driven by price increases and improved operational efficiency, allowing the company to hit its fiscal 2025 target of $1.3 billion in streaming operating income.
Disney’s Parks & Experiences division also continued to perform well, with revenue up 6% domestically and 10% internationally. CEO Bob Iger announced plans to double share repurchases to $7 billion next year and increase the dividend to $1.50.
Despite the mixed results, Disney is optimistic about the future, expecting double-digit adjusted earnings growth in fiscal 2026.
Source: CNBC