Walt Disney (DIS) Stock Increases by 7% After D’Amaro’s First Earnings Outperform Expectations

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TLDR

  • Disney reported Q2 fiscal 2026 revenue of $25.2 billion, up 7% year over year, beating estimates of $24.9 billion
  • Adjusted EPS came in at $1.57, topping the $1.49 analyst consensus
  • New CEO Josh D’Amaro guided fiscal 2026 adjusted EPS growth to approximately 12%
  • Entertainment streaming (SVOD) operating income surged 88% year over year, pushing margin above 10% for the first time
  • Disney stock jumped nearly 8% in early trading following the results

(SeaPRwire) –   Walt Disney (DIS) stock surged almost 8% in early trading on Wednesday after the company delivered stronger-than-expected earnings for Q2 fiscal 2026, marking the first quarterly results under new CEO Josh D’Amaro.

For the quarter ending in March, Disney recorded revenue of $25.2 billion, reflecting a 7% increase compared to the same period last year. This exceeded analysts’ expectations of $24.78 billion. Adjusted EPS reached $1.57, surpassing the consensus estimate of $1.49.

The Walt Disney Company, DIS
DIS Stock Card

D’Amaro, who assumed leadership from Bob Iger in mid-March, outlined his strategic priorities during the earnings call. His plan focuses on producing creative content, expanding the streaming business, capitalizing on live sports, and continuing investments in theme parks and cruise lines.

The company aims to execute at least $8 billion in stock buybacks throughout the fiscal year.

Achieving Streaming Milestone

The Entertainment segment emerged as a standout performer. SVOD operating income climbed to $582 million, representing an 88% year-over-year increase. This achievement pushed the streaming margin above 10% for the first time—a target Disney had initially set for the entire fiscal year.

SVOD revenue grew by 13%, fueled by subscriber gains and higher average subscription rates. Advertising revenue from Disney+ also contributed to this improvement. Box-office successes from “Zootopia 2” and “Avatar: Fire and Ash” further bolstered results during the quarter.

CFO Hugh Johnston highlighted that streaming now generates double the revenue of the company’s traditional TV business, which he described as shrinking each quarter.

Parks and Sports Present Mixed Results

The Experiences division—encompassing parks, cruise ships, and consumer products—achieved record highs in both revenue and operating income for Q2, totaling $9.5 billion and $2.6 billion respectively. Operating income for the division rose 5% from the prior year.

Visitors spent more per trip at U.S. theme parks, and cruise operations saw increased passenger volume. However, Johnston noted that domestic park attendance declined, partly due to fewer international tourists and competition from Universal’s newly opened Epic Universe theme park in Orlando.

D’Amaro characterized current domestic demand as “healthy,” but cautioned that Disney is “aware of the macroeconomic uncertainty facing consumers.” Johnston added that rising gasoline prices are being closely monitored.

Sports represented the weakest segment. ESPN experienced a 5% drop in operating income to $652 million, primarily driven by escalated rights fees and production costs.

Johnston positioned ESPN not merely as a traditional network but as a versatile content brand capable of widespread distribution and monetization across various platforms. He emphasized that the sports business is still in the early stages of its transition to streaming compared to the entertainment division.

Guidance

D’Amaro revised fiscal 2026 adjusted EPS growth guidance upward to approximately 12%, exceeding the previous “double digits” projection. The company targets $5.3 billion in Q3 segment operating income. He also reiterated expectations for double-digit adjusted EPS growth in fiscal 2027.

Regarding artificial intelligence, D’Amaro stated that the technology offers “significant long-term opportunities” for Disney, especially in enhancing production efficiency, while underscoring that human creativity remains central to the company’s creative process.

At the close of trading on Wednesday afternoon, Disney stock was up around 7%.

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