Disney Beats Q1 Estimates, Holds Steady on Full-Year Outlook as Streaming and Parks Drive Growth
Walt Disney Co. (DIS) delivered a stronger-than-anticipated start to its fiscal year, reporting first-quarter results that exceeded analyst projections on Monday. The performance, driven by growth across its entertainment, experiences, and sports divisions, allowed the company to reaffirm its full-year earnings guidance.
For the quarter ended December 27, Disney posted revenue of $25.98 billion, a 5% increase year-over-year and above the consensus estimate of $25.7 billion. Adjusted earnings per share came in at $1.63, down from $1.76 in the prior-year period but beating the FactSet consensus of $1.57.
"Our results this quarter demonstrate the underlying strength of our brands and our strategic focus," said CEO Bob Iger and CFO Hugh Johnston in a joint statement. "We are managing our business for long-term growth and are confident in our path to deliver significant shareholder value."
The company's entertainment segment saw revenue rise 7% to $11.61 billion, fueled by what leadership termed "strong" growth in subscription streaming services. Theatrical releases, including the successful "Zootopia 2" and "Avatar: Fire and Ash," provided an additional boost.
Disney's Experiences division, encompassing its global parks and consumer products, reported a 6% revenue increase to $10.01 billion. Both domestic and international parks grew 7%, reaching $6.91 billion and $1.75 billion, respectively.
Looking ahead, Disney maintained its forecast for double-digit growth in adjusted earnings per share for fiscal 2026, with the majority of that growth expected in the latter half of the year. The guidance underscores management's belief that its ongoing restructuring and investments—particularly in streaming profitability and park expansions—are on track.
However, the company noted near-term pressures. Operating income growth in the Experiences segment is expected to be modest due to factors like international travel softness affecting U.S. parks and pre-opening costs for new attractions like the World of Frozen at Disneyland Paris. The Sports segment also anticipates a quarterly operating income dip of roughly $100 million due to rising content rights costs.
Analyst & Investor Commentary:
"This is a solid, no-surprises quarter that shows Disney's core engine is humming," said Michael Torres, portfolio manager at Horizon Capital. "Reaffirming the full-year outlook is the key takeaway—it suggests they see sustained momentum from parks and a turning point in streaming losses."
"The stock reaction might be muted because the beat was expected, but strategically, they're checking the boxes," noted Priya Sharma, media analyst at Flintwood Research. "The linear TV decline is being offset, and the park revenue is resilient. The real test is hitting that second-half EPS acceleration."
"A 'beat' on lowered expectations isn't a victory," argued David Feld, editor of The Contrarian Investor newsletter. "EPS is still down year-over-year! They're celebrating not falling as far as feared while burning cash on streaming and overbuilding parks. The guidance is hope, not a strategy."
"As a longtime passholder, I see the value," shared Linda Chen, a small business owner from Anaheim. "The parks are packed, and new lands like Arendelle keep people coming. If the parks and movies are strong, the company will be fine."