Key Takeaway:
- Walt Disney Company beat estimates with $25 billion in revenue and $1.57 earnings per share.
- The company scrapped its investment in OpenAI following the shutdown of the Sora video tool.
- Zootopia 2 became a massive hit, earning $ 1.9 billion at the global box office.
The Walt Disney Company reported stronger-than-expected fiscal second-quarter earnings on Wednesday, sending shares up more than 6% despite a decline in attendance at its U.S. theme parks in the company’s first earnings report under new CEO Josh D’Amaro.
Disney posted adjusted earnings per share of $1.57 for the quarter, topping analyst estimates of $1.51. Revenue rose 7% to $25.2 billion, above forecasts of $24.8 billion, while operating income increased to $4.6 billion from $4.4 billion a year earlier.
The earnings report marked D’Amaro’s first full quarter since taking over as CEO on March 18. Investors responded positively, with Disney stock climbing 6% in midday trading.
Parks Revenue Slips as U.S. Attendance Falls
Revenue in Disney’s experiences division, which includes parks and cruise operations, fell to $9.5 billion from a record $10 billion in the previous quarter. The company said the decline was driven by a 1% drop in attendance at its U.S. parks.
Despite softer attendance, spending per guest on admissions, food, and merchandise increased 5% during the quarter.
Disney CFO Hugh Johnston said the company has not seen changes in consumer behavior or future bookings despite rising gasoline prices in the United States.
“We haven’t seen any change in consumer behavior,” Johnston told investors, while adding that Disney remains “mindful of the macro uncertainty consumers are facing.”
The Walt Disney Company said demand for its U.S. parks remains strong and expects attendance to improve in the third quarter as international travel trends recover and competition from NBCUniversal’s Epic Universe theme park stabilizes.
Streaming and Entertainment Drive Revenue Growth
Disney’s entertainment division reported a 10% increase in revenue to $11.72 billion. Streaming revenue rose 13%, helping offset weakness in other segments
The sports division reported a 5% decline in operating income due to higher sports rights and marketing costs, although revenue rose 2% to $4.61 billion following a January agreement with the National Football League.
Johnston said Disney continues to invest in ESPN, calling it “an important contributor to our distribution portfolio.”
D’Amaro also highlighted the company’s focus on major franchises and intellectual property. He said Zootopia 2 generated $1.9 billion at the global box office and surpassed 1 billion streaming hours on Disney+.
Disney Maps Long-Term Strategy, Ends OpenAI Investment Plan
D’Amaro outlined a long-term strategy centered on expanding Disney’s intellectual property portfolio, reaching more consumers, and using advanced technologies to improve storytelling and monetization.
“We are focused on investing in our strongest brands and franchises,” D’Amaro said during the earnings call.
Disney also said it will no longer proceed with a planned investment in OpenAI after the artificial intelligence company shut down its Sora video-generation tool.
“As widely reported, OpenAI opted to shut down Sora, and as a result, we will not proceed with our previously planned investment,” Disney said in a statement.
The Walt Disney Company forecast 12% adjusted earnings growth for 2026 and said it plans at least $8 billion in share repurchases. Disney also projected operating income of roughly $5.3 billion for the third quarter and double-digit adjusted earnings growth in 2027.
