The performance of Walt Disney Company (DIS.US) is mixed: streaming media and theme parks drive growth, while expenses for big movies drag down the new financial quarter.

Thanks to strong performance in streaming media and theme park businesses, Walt Disney Company(DIS.US) exceeded market expectations for fourth-quarter profits. At the same time, the media giant announced a 50% increase in dividends and a doubling of the size of its stock buyback plan for the 2026 fiscal year. However, the company's stock price fell in pre-market trading due to the impact of several major productions, including the new "Avatar" movie, on its performance in the first quarter of the new fiscal year. Data shows that for the fourth quarter of the 2025 fiscal year ending in September, Walt Disney Company's adjusted earnings per share was $1.11, a 3% decrease from the same period last year but 6 cents higher than analysts' average expectations. Revenue was $22.5 billion, roughly in line with the same period last year but slightly lower than analysts' expectations of $22.75 billion. Specifically, the operating profit of the experience division, including theme parks, reached $1.88 billion, a 13% year-on-year increase, benefiting from the expansion of the US cruise business and the performance growth of Disneyland Paris. Due to the failure of this year's film releases to replicate the success of last year's "Incredibles 2" and "Deadpool and Wolverine," operating profit for the entertainment division plummeted by more than one-third to $691 million. Traditional TV business profit decreased by 21% to $391 million. Streaming media business profit surged by 39% to $352 million, with Disney+ and Hulu platforms together adding 12.5 million new subscribers this quarter, surpassing a total of 196 million users. CFO Hugh Johnston stated that the new distribution agreement with cable TV and broadband service provider Charter Communications (CHTR.US) helped attract more streaming media new users. He also mentioned that the box office hit "Stitch: The Movie" debuted on the Disney+ platform during the same period, with 14.3 million views in the first five days. Facing a comprehensive decline in traditional broadcast TV and cable TV industries, Walt Disney Company is undergoing a business transformation. The company continues to invest in new theme park attractions and cruise projects while focusing on attracting streaming media subscribers. Since Bob Iger returned to Walt Disney Company as CEO in 2022, he has implemented significant cost-cutting measures. His current contract expires at the end of 2026, and Walt Disney Company has announced that his successor will be determined early next year. Although TV business subscription fees and advertising revenue continue to decline, the company remains confident in its development for the next two years. Walt Disney Company expects double-digit growth in adjusted earnings per share for the 2026 fiscal year, consistent with previous expectations, while adjusted earnings per share for the 2027 fiscal year will also maintain double-digit growth. The board of directors also announced an increase in dividends from $1 to $1.50 per share and a doubling of the stock buyback plan for the 2026 fiscal year to $7 billion. In a statement, Iger emphasized, "This year we have made significant progress. By fully leveraging the value of creative and brand assets, we have strengthened the company's capabilities and achieved substantial breakthroughs in consumer-facing business areas." Challenges in the first quarter However, at the beginning of the new fiscal year, Walt Disney Company's entertainment segment is expected to face challenges in streaming media, film, and television. The company stated that the first-quarter operating profit for streaming media business is expected to reach $375 million, a slight increase from the same period last year but below Wall Street's expectations. Walt Disney Company pointed out that the theatrical releases of "Zootopia 2" and "Avatar: Fire and Ashes" will lead to a $400 million decrease in revenue. It is understood that the new "Avatar" film is scheduled to be released on December 19, and will only contribute two weeks of box office revenue before the end of this quarter. In addition, a decrease in political advertising revenue will also impact the TV business. Although the sports division will benefit from the launch of ESPN's streaming service, scheduling of sports rights expenditures will temporarily restrain the growth of operating profit in this period. Meanwhile, the theme park and cruise business are expected to incur $150 million in planned expenses in the first quarter due to new ship investments and dock renovations. After the financial report was released, as of the time of writing, the stock fell more than 4% in pre-market trading.