Disney Beats Earnings Estimates as Streaming Growth Accelerates
The Walt Disney Company reported stronger-than-expected second-quarter financial results, driven by accelerating streaming revenue growth and solid performance from its theme park business.
The entertainment giant posted adjusted earnings per share of $1.57, beating Wall Street expectations of $1.50 per share. Revenue increased 7% year-over-year to $25.17 billion, also surpassing analyst forecasts of $24.85 billion.
Following the earnings release, Disney shares climbed more than 7% in market trading.
Streaming Business Continues to Gain Momentum
Disney’s Entertainment SVOD business delivered another quarter of strong growth, with revenue rising 13% compared to the same period last year. This marked an acceleration from the 11% growth recorded during the previous quarter.
The company said the improvement was supported by stronger monetization following recent pricing adjustments, as well as increased subscriber volume from new international wholesale agreements.
Total operating income for the entertainment segment rose to $4.6 billion, up from $4.4 billion during the same quarter of fiscal 2025.
Disney Maintains Strong Profit Growth Outlook
Disney reaffirmed its fiscal 2026 adjusted earnings growth guidance of approximately 12%, excluding the impact of the 53rd week, or roughly 16% including it.
For the third quarter, the company expects total segment operating income of approximately $5.3 billion. Disney also maintained its outlook for double-digit adjusted EPS growth in fiscal 2027.
Chief Executive Officer Josh D’Amaro said the company’s creative and operational momentum continues to support accelerating growth expectations for the second half of the fiscal year.
Theme Parks Deliver Record Quarterly Results
Disney’s Experiences segment generated record second-quarter revenue and operating income. Revenue for the division increased 7%, while operating income rose 5% compared to the prior year.
Domestic theme parks also saw per capita guest spending increase by 5%. However, overall attendance declined slightly by 1%, mainly due to weaker international visitor demand.
Meanwhile, Disney’s Sports segment reported a 5% decline in operating income, primarily because of higher sports rights fees and increased marketing expenses.
Streaming Margins Reach Major Milestone
Disney also achieved its first double-digit operating margin in its Entertainment SVOD segment during the quarter.
The company said it remains on track to deliver at least a 10% streaming operating margin for the full 2026 fiscal year, highlighting continued progress toward profitability in its direct-to-consumer business.
Bank of America Says Disney Is “Bringing the Magic Back”
Following the earnings report, Bank of America analyst Jessica Reif Ehrlich described Disney’s quarterly performance as a strong sign that the company is regaining momentum.
The analyst noted that revenue, operating income, and earnings all exceeded expectations. Ehrlich also highlighted growing profitability in Disney’s streaming business, improving performance at its parks division, and long-term opportunities in sports personalization, betting, and multi-screen experiences tied to ESPN.
Bank of America reiterated its Buy rating on Disney shares along with a $125 price target.
