Disney reports earnings before the bell. Here’s what to expect – CNBC

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% after the report.

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 with last year. Disney said international visitation at domestic parks was softer, a trend that continued from the prior quarter.

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.

“We continue to see a strong consumer. While there may be some concerns around the macros and specifically around the price of fuel, we have not seen any evidence of that,” Disney CFO Hugh Johnston told CNBC’s Julia Boorstin. He added that bookings for the second half of the year “are quite strong.”

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

• Earnings per share: $1.57 adjusted vs. $1.49 expected
• Revenue: $25.17 billion vs. $24.78 billion expected

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, a year earlier. 

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. 

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, Disney 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.

On Wednesday’s earnings call with investors, Johnston said the company isn’t anticipating any changes to adjusted earnings growth expectations for fiscal 2026 or 2027 in light of gas prices or consumer spending.

“However we’re mindful of the macro uncertainty consumers are facing and we’re not immune to the impacts, including how a significant further rise in fuel prices from current levels could eventually lead to changes in consumer behavior,” Johnston said on the call. “If that possibility were to occur, each business has levers in place to make adjustments in order to offset those kinds of macro pressures.”

The report marks the first since Josh D’Amaro took over as CEO in March. Under the new CEO, who succeeded 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.

“It’s a competitive streaming marketplace out there right now,” D’Amaro said on Wednesday’s call. “Despite that, we saw an increase in engagement in the quarter, and then when we look ahead, our key drivers for engagement growth include content and product enhancements.” 

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

Subscription and affiliate fees climbed 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 with 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.

On Wednesday Disney CFO Johnston addressed the NFL’s move to renegotiate its media rights deals earlier than previously planned. In exchange for more revenue, the NFL would eliminate the opt-out clause in the 2029-30 season, CNBC previously reported.

“We haven’t engaged yet with the league on early renewal conversations, but we’re not dogmatic about the process, and we’re always willing to have a conversation with the NFL to find new opportunities for growth,” Johnston said. “We expect to be in business with the league for years to come, and we’ll of course, evaluate this deal as we would any deal with discipline and a focus on driving value for Disney shareholders.”