Disney Shares Drop After Mixed Quarter as Streaming Growth Offsets TV Declines

Disney Shares Drop after mixed fiscal fourth-quarter results, with strong streaming performance and steady gains in its experiences division unable to fully counter declines in its traditional TV networks. The company beat analyst expectations on earnings but fell short on revenue, leading shares to close more than 7% lower.

Disney posted adjusted earnings per share of $1.11, above Wall Street’s estimate of $1.05. Revenue came in at $22.46 billion, slightly below the expected $22.75 billion and marginally lower than the same quarter last year. Net income rose sharply to $1.44 billion, compared with $564 million in the year-ago period.

Executives said the company plans to raise its dividend and double its share-buyback program for fiscal 2026. Leadership also emphasized optimism heading into next year, driven largely by streaming growth and continued strength in parks and consumer experiences.

Streaming Strength Drives Entertainment Unit Amid TV Weakness

Disney Shares Drop as the entertainment unit reported $10.21 billion in revenue, a 6% decline from last year. The drop stemmed primarily from continued erosion in linear television, lower ad revenue, and a less impactful theatrical slate. Advertising in particular saw a downturn, with a $40 million year-over-year impact tied to reduced political spending.

The company’s TV networks, including ESPN and ABC, also faced headwinds from an ongoing carriage dispute with YouTube TV, which began on October 31. Disney executives said negotiations are active and the company is aiming for an agreement that restores network access for subscribers.

Disney Shares Drop despite linear declines, streaming delivered significant growth, with operating income rising 39% to $352 million. Price increases and a steady expansion of subscription bundles supported the improvement. Disney+ added 3.8 million subscribers, bringing its global total to 131.6 million, while Hulu’s subscriber base reached 64.1 million.

Leadership noted that this is the last quarter in which Disney will report subscriber counts and ARPU, following a trend set by Netflix. The focus going forward will shift toward revenue, profitability, and engagement metrics.

The launch of the direct-to-consumer ESPN app earlier this year also contributed to stronger engagement. Bundling remains a key driver of growth, with 80% of new ESPN app subscribers arriving through bundled offerings. Executives said the app is attracting new advertisers and strengthening overall audience activity.

Experiences, Parks, and Cruises Deliver Consistent Growth

Disney Shares Drop even as the experiences segment — which includes theme parks, resorts, cruises, and consumer products — continued to outperform other divisions. Revenue rose 6% to $8.77 billion, while operating income increased 13% to $1.88 billion.

Executives reported that consumer demand remains resilient in the experiences business. Bookings for the upcoming quarter are up 3%, and per-guest spending at domestic parks has risen 5%. Strong results were recorded even as Disney expanded its cruise fleet, which brought higher upfront costs.

Cruises were highlighted as one of the segment’s strongest contributors, with new ships filling quickly despite increased capacity. Two additional cruise ships — Disney Destiny and Disney Adventure — will join the fleet soon, with the latter becoming Disney’s first ship home-ported in Asia.

International park revenue increased 10% to $1.74 billion, supported by improved performance at Disneyland Paris. Domestic park revenue rose 6% to $5.86 billion, with demand largely meeting company expectations. Leadership noted that Comcast’s new Epic Universe theme park in Florida created competitive pressure across the region, but its impact on Disney was more limited than anticipated.

Outlook for Business Owners and Entrepreneurs

Disney’s latest quarter highlights several strategic themes relevant to business owners and entrepreneurs:

• Streaming models continue shifting toward profitability, with bundling and international expansion playing critical roles.
• Legacy businesses can coexist with digital expansion, but may require continuous reinvention to maintain relevance.
• Experiential offerings remain a powerful growth segment, even during periods of broader economic uncertainty.
• Content distribution disputes, such as the YouTube TV situation, underscore the importance of diversified delivery channels.

While the company faces ongoing challenges in traditional media, Disney Shares Drop highlights how its multichannel strategy — spanning streaming, sports, parks, and consumer brands — demonstrates how large enterprises are adapting to rapid shifts in audience behavior and digital consumption.