The new CEO achieved a successful start in the first quarter in office: film box office and theme park consumption both surged, driving Walt Disney Company's (DIS.US) profits beyond expectations.

The performance of The Walt Disney Company (DIS.US) for the second quarter of the 2026 fiscal year exceeded Wall Street's expectations. The financial report shows that the adjusted earnings per share for Walt Disney Company's second quarter increased to $1.57, higher than the average analyst expectation of $1.51. Revenue was $24.9 billion, a 7% year-over-year increase, also surpassing Wall Street's expectations. This better-than-expected performance was mainly attributed to the improved profitability of the streaming media business, the boost from new movies "Avatar" and "Zootopia 2", and increased spending by visitors at the company's resorts and cruise ships. The operating profit of Walt Disney Company's three major business segments Entertainment, Experience, and Sports all exceeded analyst expectations. This performance has reinforced the business stability under the leadership of new CEO Josh D'Amaro, who took over the company in March this year from Bob Iger. The revenue growth in the entertainment business sector was mainly due to a 4% increase in revenues from the Fubo deal. In addition, higher actual rates, favorable trends in major foreign currency exchange rates, and growth in user numbers also drove an increase in subscription fees and affiliate marketing costs. At the same time, the growth in theater distribution revenue also led to an increase in content sales revenue. Looking ahead, Walt Disney Company expects the total department operating profit for the 2026 fiscal year to be around $5.3 billion, with earnings per share expected to increase by about 12% to around $6.64 (above the market's general expectation of $6.63). The company plans to repurchase at least $8 billion of its stock in the 2026 fiscal year. In a letter to shareholders on Wednesday, D'Amaro and CFO Hugh Johnston stated, "Creative and operational momentum drove a strong quarter, and we continue to expect accelerated growth in the second half of the fiscal year." In pre-market trading in New York, the company's stock rose by about 8%. As of Tuesday's close, the stock had fallen by 12% year-to-date, while the S&P 500 index had risen by 6% over the same period. The Direct-to-Consumer department, led by Joe Early and Adam Smith, achieved double-digit profitability for the first time (including Disney+ streaming service). This achievement marks a long-awaited milestone for the platform, which had experienced several years of losses since its launch. The film studio, led by Alan Bergman, benefited from strong demand for "Avatar: Fire and Ashes," "Zootopia 2," and Pixar Animation Studio's "Tinker Bell." These three films have grossed over $3.7 billion globally since their release. Due to a decline in ESPN advertising revenue and an increase in program costs, the operating profit of the Sports business segment decreased by 5%. For the current quarter, Walt Disney Company expects the operating profit to decrease by 14% due to an increase in copyright costs. Spending by visitors at Walt Disney Company parks in California and Florida increased, helping to offset a 1% decline in park attendance due to fewer foreign visitors. In addition, cruise bookings increased due to the launch of new ships in November and March. The company stated in the letter that while they remain cautious about the "macroeconomic uncertainties facing consumers at present," demand for domestic parks and resorts remains steady. This performance marks an initial victory for D'Amaro after a somewhat rocky start. Previously, the Federal Communications Commission (FCC) required an early review of Walt Disney Company's ABC television station; OpenAI shut down the Sora video generator, leading to the collapse of a $1 billion deal with Walt Disney Company; and Epic Games, which is developing a virtual universe based on Walt Disney Company intellectual property, announced layoffs and stated that demand for "Fortnite" was slowing down. Building a one-stop "super app" It has been reported before that D'Amaro's long-term strategy includes simplifying customer interactions with the Walt Disney Company brand, including integrating the company's many scattered mobile apps into the Disney+ platform, where users can order park tickets, purchase merchandise, play games, and watch movies. For a long time, Walt Disney Company has been planning to create a comprehensive "super app" covering all aspects of its business, and even planned to launch a system to compete with Amazon.com, Inc.'s Prime membership service. Former CEO Bob Iger had considered this idea multiple times over a decade and even test-launched a streamlined pilot product in the UK. In recent years, with the launch of several independent apps by Walt Disney Company, the company has also discussed integrating solutions multiple times. Insiders said that due to multiple obstacles at the operational level, this plan has not been able to progress. Currently, Walt Disney Company is working on the merger of the Hulu video platform and Disney+, but issues such as independent technical architectures, division of film rights, and other issues have added resistance to the integration process.