Disney stock pops 7% after second-quarter revenue beat

Disney on Wednesday reported quarterly revenue that exceeded analyst expectations, once again driven by its streaming and theme park units. Shares of the company gained roughly 7% in premarket trading.

The company's experiences segment, which includes Disney's theme parks and cruises, reported nearly $9.5 billion in revenue, up 7% year over year. While global guest attendance grew 2%, domestic park visitation declined 1% compared to last year. Disney cited softer international visitation at domestic parks for the slip.

Yet despite macroeconomic trends and uncertainty for consumers, including related to the U.S.-Israel attacks on Iran in late February, which have caused oil prices to surge, Disney said demand at its domestic parks remained healthy. The company also reported an increase in guest spending during the quarter.

Here's how Disney performed in its fiscal second quarter, ended March 28, compared with what Wall Street expected, according to LSEG:

Overall revenue for the company's fiscal second quarter increased to $25.17 billion, up 7% from the same period last year. 

Net income for the quarter was $2.47 billion, or $1.27 per share, down from $3.4 billion, or $1.81 a share, in the same period last year. 

Adjusting for one time items, including ESPN's acquisition of the NFL Network and other media assets, Disney reported $1.57 in earnings per share. It was not immediately clear if that reported EPS was comparable to Wall Street estimates of $1.49, according to LSEG. 

Disney provided additional details on its fiscal 2026 guidance, which includes full-year adjusted earnings growth of about 12%. The company also said it was targeting at least $8 billion in share repurchases for the fiscal year, up from the previously announced $7 billion. In addition, the company expects third-quarter total segment incoming of roughly $5.3 billion. 

For its fiscal 2027 year, Disney said it expects double-digit growth in adjusted earnings.

The report marks the first since Josh D'Amaro took over as CEO in March. Under the new CEO, who replaced Bob Iger after his two turns at the helm totaling roughly 20 years, Disney has already been through a round of layoffs and has faced mounting political pressure surrounding its late night TV host Jimmy Kimmel.

On Wednesday, D'Amaro outlined his strategic plans for future growth and opportunities – much of which focused on investing in intellectual property and advancing the technology around its storytelling. 

These elements were highlighted as propelling the company's theme parks and streaming businesses in particular.

Disney's entertainment segment – which includes its traditional TV, streaming and theatrical releases – saw revenue increase 10% to $11.72 billion compared to the same period last year. Entertainment revenue got a 4% boost from the closed Fubo deal, Disney said. 

Subscription and affiliate fees increased 14% to $7.8 billion, boosted by recent streaming price hikes. Advertising revenue was also up, jumping 5%, in part due to higher impressions linked to streaming. 

Recent box office wins, including "Avatar: Fire and Ash," and "Zootopia 2," also helped lift the unit's revenue. 

Last quarter Disney stopped reporting some details for the entertainment segment, including the breakdown of revenue and operating income for its linear TV networks. The company has also stopped reporting quarterly streaming subscriber numbers.

The continued declines in linear TV due to the consumer shift to streaming has weighed on Disney and its peers in prior quarters. 

Disney reports results for ESPN in its sports segment, which saw revenue grow 2% to $4.61 billion in the quarter. The increase was tied to higher subscription and affiliate fees, as well as the NFL media deal. 

The company noted there were higher costs compared to the prior-year quarter for the sports segment due to both contract rate increases and costs for new sports rights. While live sports garner the biggest audiences, the cost to broadcast games has risen significantly. 

ESPN's direct-to-consumer streaming app – which launched in August – was a bright spot in the most recent quarter. The company said revenue generated from its digital subscribers during the period more than offset the declines in the traditional TV ecosystem.