Disney beats estimates on streaming surge and theme park strength
Adjusted earnings per share of $1.57 topped forecasts, while revenue rose 7% to $25.17 billion, though the Sports division faced margin pressure.
Walt Disney (NYSE:DIS) has reported second-quarter results that exceeded Wall Street expectations, driven by accelerating growth in its streaming business and continued strength in theme park operations. Adjusted earnings per share reached $1.57, surpassing analyst forecasts of $1.50, while total revenue climbed 7% year on year to $25.17 billion. This performance topped consensus estimates of $24.85 billion, prompting shares to rise by 7.4% following the announcement.
The company's Entertainment SVOD business was a primary engine for this growth, with revenue increasing by 13% during the quarter. This figure represents an acceleration from the 11% growth recorded in the previous quarter. Management attributed the improvement to stronger monetisation following pricing adjustments and subscriber gains linked to new international wholesale agreements. Notably, Disney achieved its first double-digit operating margin in the segment and remains on track to deliver at least a 10% margin for the full fiscal year 2026.
Record performance from the Experiences division further bolstered the results, with both revenue and operating income rising 7% and 5% respectively compared with the prior year. Per capita spending at domestic parks increased by 5%, although attendance declined by 1% as international visitation remained soft. Despite the dip in visitor numbers, the higher spending per head helped sustain the division's financial momentum.
In contrast, the Sports division saw its operating income fall by 5% during the quarter. This decline was driven by increased sports rights expenses and higher marketing costs, which put pressure on margins in that specific segment. Overall, total operating income for Disney's segments increased to $4.6 billion from $4.4 billion in the same quarter of fiscal 2025, representing a 4% growth.
Looking ahead, management reaffirmed its fiscal 2026 guidance for adjusted earnings per share growth of approximately 12%, excluding the impact of the 53rd week, or roughly 16% including it. The company also reiterated expectations for double-digit adjusted EPS growth in fiscal 2027. For the third quarter, Disney expects total segment operating income of approximately $5.3 billion.
Chief Executive Officer Josh D'Amaro stated that creative and operational momentum drove the strong quarterly results. He noted that the company continues to expect growth to accelerate in the second half of the fiscal year, underpinning investor confidence in the company's strategic direction.
