Disney reported fiscal fourth-quarter earnings that topped analyst expectations for earnings but missed on revenue due to challenges in its entertainment business, leading to a more than 7% drop in stock price. However, net income doubled to $1.44 billion, with adjusted earnings per share of $1.11. Revenue for the quarter was nearly $22.5 billion. Disney plans to boost dividends and double its share buyback plan for fiscal 2026.
Revenue for Disney’s entertainment unit fell 6% to $10.21 billion, impacted by struggles in TV networks and theatrical releases. Disney’s TV networks, including ESPN, were unavailable for YouTube TV customers since Oct. 31 due to a carriage dispute. Streaming remains a bright spot, with operating income for streaming rising and full-year operating income reaching $1.3 billion, up $1.2 billion from last year.
The launch of the ESPN direct-to-consumer app in August attracted new users, with encouraging rates of pay TV subscribers using the app. Despite challenges in the pay TV bundle, sports segment earnings, including ESPN, remain strong. Disney+ added 3.8 million paid subscribers, reaching a total of 131.6 million, while Hulu had 64.1 million customers. Disney is integrating Hulu into the Disney+ app and will no longer report subscriber numbers or ARPU. Revenue for ESPN was up 3% to $4 billion, with operating income at $898 million. Revenue for experiences, including theme parks and cruises, rose 6% to $8.77 billion, with operating income up 13% to $1.88 billion.
Disney’s cruise business is seeing growth, with cruises selling out despite fleet expansion. Revenue for domestic parks was up 6% to $5.86 billion, and international parks revenue increased 10% to $1.74 billion, boosted by growth at Disneyland Paris. Demand for U.S. parks remains strong, with Epic Universe in Florida not impacting Disney as expected.
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