Key Takeaways:
- Adjusted EPS of $2.06 beat consensus of $1.86, up from $1.61 a year earlier
- Revenue rose 7% to $25.2 billion, slightly missing estimates of $25.4 billion
- Disney raised fiscal 2026 buyback target to at least $9 billion from $8 billion
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Disney tops Q3 profit estimates, lifts buyback target to $9 billion
Disney reported adjusted earnings of $2.06 per share for fiscal Q3, beating the $1.86 consensus, while revenue rose 7% to $25.2 billion.
Domestic parks attendance rose 3% and per-capita spending climbed 4%, with Walt Disney World in Orlando delivering a "stand-out quarter," CFO Hugh Johnston said.
The experiences segment, which includes theme parks and cruises, generated $9.97 billion in revenue, up 10%, with operating income rising 20% to $3.02 billion. Entertainment streaming revenue climbed 11% to $5.53 billion, helped by subscriber growth, higher prices and advertising. The broader entertainment segment posted a 6% revenue increase to $11.35 billion, with segment profit up 64%. Sports revenue rose 4% to $4.5 billion, though ESPN operating income came in below estimates due to the timing of sports rights payments.
Reported net income fell to $2.64 billion, or $1.51 per share, from $5.26 billion, or $2.92 per share, a year earlier, when results included one-time tax benefits tied to Disney's purchase of Comcast's remaining Hulu stake.
Disney raised its fiscal 2026 share repurchase target to at least $9 billion from $8 billion, supported partly by the $1.2 billion sale of its 50% stake in A+E Global Media to Hearst. The company also recorded a tariff refund of approximately $100 million.
Management maintained guidance for fiscal 2026 adjusted EPS growth of approximately 12% and unadjusted EPS growth of approximately 16%. For the fiscal fourth quarter, Disney expects total segment operating income of about $4.9 billion.
Disney separately announced a global partnership with TikTok to bring curated, fan-created Disney content to the platform, expanding engagement with younger audiences. Beginning in fiscal Q1 2027, the company will move its consumer products business from the experiences segment to the entertainment division.
Shares rose about 4% in premarket trading. The earnings beat marks the second straight quarter of better-than-expected profitability under CEO Josh D'Amaro, who succeeded Bob Iger in March. Investors will watch the fiscal Q4 report for streaming margin trends and parks bookings momentum.
This article is for informational purposes only and does not constitute investment advice.
[1] Disney Tops Profit Estimates and Unveils TikTok Partnership to Bring More Videos to Disney+[2] Walt Disney (DIS) Q3 FY26 earnings beat estimates; revenue up 7% - Alphastreet[3] Disney Shares Jump 4% As Q3 Earnings Beat Estimates; Share Buyback Target Hiked To $9 Billion[4] Disney’s streaming and parks drive profit growth in 3Q
