New CEO Josh D'Amaro raised the company's full-year adjusted earnings growth forecast to about 12% and outlined plans to invest in content and technology
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Adjusted earnings of $1.57 per share and $25.2 billion in revenue for the fiscal second quarter put Disney $DIS ahead of Wall Street's targets on Wednesday, lifting its shares roughly 5% in premarket trading. The consensus estimate heading into the print called for $1.49 in adjusted EPS and $24.78 billion in revenue, per CNBC.
Revenue rose 7% from $23.6 billion in the same period a year earlier. On a GAAP basis, net income came in at $2.25 billion, or $1.27 per stock, down from $3.28 billion, or $1.81 per stock, in the prior-year quarter. The year-over-year GAAP decline reflects a $1.016 billion tax benefit recorded in the prior-year quarter from the resolution of a prior-year tax matter, the company said.
Bringing in $9.49 billion — a fiscal second-quarter record — the experiences segment, encompassing parks, cruise ships, and consumer products, grew revenue 7% versus the prior year. Segment operating income reached $2.62 billion, a 5% gain that also set a quarterly high. Guests spent more per visit at U.S. parks, with per capita spending up 5%, even as domestic attendance edged down 1%. Speaking to CNBC, CFO Hugh Johnston said the business had yet to register any sign of consumers pulling back amid broader economic concerns, and pointed to second-half bookings that he called "quite strong."
Revenue at the entertainment segment, home to streaming, linear TV, and theatrical releases, climbed to $11.72 billion, a 10% improvement over the year-ago period. The unit's operating income came in at $1.34 billion, up 6%. Streaming was a particular bright spot: entertainment streaming operating income more than doubled, rising 88% to $582 million, and the streaming operating margin reached 10.6% — the first time Disney's entertainment streaming business has crossed into double-digit margins. Theatrical performance from both "Zootopia 2" and "Avatar: Fire and Ash" provided additional tailwinds for the segment.
The sports segment, which houses ESPN, generated $4.61 billion in revenue, a 2% rise, but operating income slipped to $652 million — down 5% — as escalating rights fees and production expenses weighed on margins.
Josh D'Amaro, who took over from Bob Iger in mid-March, used a shareholder letter to lay out a growth vision built around deepening investment in IP and harnessing technology as a lever for storytelling-driven revenue. In the letter, D'Amaro wrote: "We see a significant opportunity to engage and entertain our fans more deeply in both digital and physical environments."
For fiscal 2026, the company upgraded its full-year adjusted earnings growth target to approximately 12%, sharpening a forecast that had previously only specified "double digit" growth. Buyback ambitions were also lifted, with the repurchase goal for the fiscal year moving to a minimum of $8 billion from $7 billion; looking further out, Disney signaled that double-digit adjusted EPS growth is expected to carry through into fiscal 2027.
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