Disney (DIS) stock jumped over 4% in premarket trading after the company reported fiscal third quarter earnings that beat expectations on Wednesday as it focused on cutting costs and maintaining growth in parks and streaming.
For the quarter, Disney reported adjusted earnings per share of $2.06, surpassing the Street’s forecasts of $1.86. Revenue grew 7% year over year to $25.17 billion, which was just shy of expectations of $25.38 billion, according to Bloomberg consensus data.
This marked the second quarterly report under new CEO Josh D’Amaro, who took the reins on March 18. Wall Street analysts had been looking for Disney’s report to rebuild confidence in the stock, which is down 17% over the past year.
“We believe our shares are undervalued and we continued to lean into share repurchases during the quarter,” D’Amaro said in the report.
He also highlighted the company’s announcement on Tuesday to sell its 50% stake in A+E Global Media, divesting brands such as Lifetime and The History Channel to the Hearst Corporation. Disney will use the $1.2 billion in proceeds to boost share buybacks to $9 billion this year, up from the previously set $8 billion goal, D’Amaro said.
Total operating income for the company was $3.65 billion in the quarter, up from $3.2 billion a year ago. In the current quarter, Disney expects operating income of roughly $4.9 billion.
Disney also reaffirmed its expectations for 12% adjusted earnings growth in 2026 and double-digit adjusted earnings growth in 2027.
Experiences return to growth amid macro uncertainty
Disney Experiences drove results in Q3, as attendance at US parks increased 3% from the same period last year and the number of global guests rose by 4%.
Overall revenue from that segment grew 10% from last year to $9.97 billion, returning to the record $10 billion in the first quarter after a slump in Q2. Revenue at US parks and experiences, including the expanding Disney Cruise Line portfolio, grew 11% year over year.
This was primarily driven by a 17% increase in revenue from resorts and vacations, a 10% increase in additional passenger cruise days, and a 2% increase in average daily hotel room rates and occupied hotel nights.
Customers also spent more at Disney parks. Average spending per customer on admissions, food, and merchandise rose by 3% year over year.
This followed Disney’s warning earlier this year that consumers faced macro uncertainty and a 1% decrease in attendance at its US parks in the previous quarter.
“We continued to face headwinds from international attendance at our domestic parks, but as expected, those headwinds moderated relative to the year-over-year impact observed in fiscal Q2,” the company said in its latest earnings release.
