The Walt Disney Company saw its shares tumble nearly 10% on Thursday following the release of fourth-quarter earnings that fell short of Wall Street expectations.
Disney reported revenue of $22.5 billion for the quarter ending September 27, roughly flat from the same period last year. While total revenue disappointed investors, net income surged to $1.3 billion, up from $460 million a year earlier, driven by strong performance in theme parks and streaming services.
The company’s entertainment segment, however, struggled. Operating income dropped $376 million to $691 million, weighed down by underperforming films such as The Fantastic Four: First Steps, The Roses, and Freakier Friday. Last year’s blockbuster releases, Inside Out 2 and Deadpool & Wolverine, set a high bar that Disney failed to replicate.
“Obviously not every film works…We’ve been around long enough to understand that,” CEO Bob Iger told analysts, adding that he remains “very optimistic” about the 2026 fiscal year with upcoming releases including Zootopia 2, Avatar: Fire and Ash, Toy Story 5, and a live-action Moana.
Streaming and Theme Parks Drive Growth
Disney’s direct-to-consumer segment offered a bright spot, with operating income rising $99 million to $352 million. The company’s streaming services now boast 196 million combined Disney+ and Hulu subscribers, with Disney+ alone reaching 132 million users, up 3.8 million from the prior quarter. International Disney+ subscriptions grew 4%.
The theme park division posted record quarterly results, with operating income of $1.9 billion, up $219 million year-over-year. Full-year operating income for the parks reached $10 billion, with international parks seeing 25% growth to $375 million and domestic parks generating $920 million, up 9%.
Despite the box office challenges, Disney’s diversified business, spanning streaming, parks, and merchandise, continues to provide strong financial resilience, positioning the company for potential recovery in 2026.
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