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Disney's Quarterly Earnings Top Views, Revenue Falls Short Despite 'Toy Story 5' Boost
Walt Disney's (DIS) fiscal third-quarter earnings rose above Wall Street's estimates on Wednesday even as revenue fell short of expectations despite a boost from "Toy Story 5."The media and entertainment giant's adjusted earnings rose to $2.06 a share for the quarter ended June 27 from $1.61 the year before, topping the FactSet-polled consensus of $1.86. Revenue improved 7% to $25.25 billion, but trailed the Street's view for a larger increase to $25.39 billion.Disney's stock rose 3.1% in Wednesday trade, cutting its year-to-date loss to 11%."Our accelerating global guests growth at experiences, Toy Story 5's theatrical and consumer products success, and strong ESPN viewership gains all helped expand our consumer reach this quarter," Chief Executive Josh D'Amaro and Chief Financial Officer Hugh Johnston said in prepared remarks.The "Toy Story 5" film has surpassed $1 billion in global box office, bringing the franchise's total haul at more than $4 billion, D'Amaro and Johnston said. The hit movie fueled sales of Toy Story merchandise and bolstered engagement on the Disney+ streaming service.Last month, UBS Securities said Disney was likely to post third-quarter earnings above expectations, driven by gains in its subscription video-on-demand, or SVOD, service and the experiences business.Revenue in the entertainment business advanced 6% to $11.35 billion as subscription and affiliate fees rose 12%. Advertising revenue slipped 1%. Entertainment SVOD sales grew 11%, driven by 15% subscription growth amid rate and volume gains, D'Amaro and Johnston said.For the fourth quarter, the entertainment segment's results will reflect Moana's weaker-than-expected performance at the box office, "along with a softer than expected advertising environment, particularly in domestic SVOD," according to D'Amaro and Johnston.Experiences revenue climbed 10% to $9.97 billion amid broad-based gains.Domestic park attendance rose 3% on a yearly basis, although the company faced continued headwinds internationally, according to the two executives. However, those headwinds moderated from the second quarter.Global guests across the experiences segment were up 4%, with Disney forecasting growth in the ongoing three-month period too, despite consumer softness in Asia, D'Amaro and Johnston said.For fiscal 2026, the company continues to project 12% growth in adjusted EPS, excluding the impact of the 53rd week, and a 16% rise including that week. The Street is looking for $6.80, compared with $5.93 reported last year.In July, streaming giant Netflix (NFLX) reported lower-than-expected second-quarter revenue, while media and connectivity giant Comcast's (CMCSA) earnings per share declined year over year.Price: $101.22, Change: $+3.04, Percent Change: +3.10%
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