Walt Disney Co. (NYSE:DIS) stock rose in Wednesday premarket trading after the entertainment giant reported fiscal third-quarter 2026 results that topped Wall Street’s earnings expectations, driven by growth in its streaming, parks and entertainment businesses.
Walt Disney Third-Quarter Results
Adjusted earnings increased to $2.06 per share, beating the analyst consensus estimate of $1.86. Revenue rose 7% year over year to $25.25 billion but came in slightly below analysts’ estimate of $25.40 billion.
The quarter marked Disney’s second earnings report under CEO Josh D’Amaro, who has focused on expanding the company’s intellectual property across its entertainment and theme park businesses.
Streaming, ESPN And Parks Deliver Growth
Disney’s entertainment segment generated revenue of $11.35 billion, up 6% from a year earlier. Direct-to-consumer streaming revenue climbed 11% to $5.53 billion, helped by subscriber growth, higher pricing and stronger advertising revenue.
The company also benefited from the box-office success of Toy Story 5, which surpassed $1 billion in global ticket sales.
The sports segment, led by ESPN, reported revenue of $4.50 billion, up 4% year over year, driven by higher subscription, affiliate and advertising revenue.
Chief Financial Officer Hugh Johnston told CNBC that the NBA and NHL Finals produced exceptionally strong ratings, with viewership more than doubling compared with prior years. He said Disney had not seen audience levels like that in roughly 25 to 30 years.
Disney’s experiences segment, which includes theme parks, resorts and consumer products, posted revenue of $9.97 billion, up 10% from a year earlier.
Johnston told CNBC that U.S. park attendance increased 3%, while per-capita guest spending rose 4%. He also highlighted strong attendance at Walt Disney World in Orlando, saying Disney outperformed trends reported by competitors and Orlando International Airport traffic data.
Last month, Comcast Corp.’s (NASDAQ:CMCSA) NBCUniversal said attendance at its Orlando theme parks declined during the quarter, citing weaker consumer sentiment and higher travel costs.
Profit, Cash Flow And Capital Returns
Total segment operating income increased 21% to $5.56 billion.
The experiences segment generated operating income of $3.02 billion, up 20% year over year. Entertainment operating income jumped 64% to $1.68 billion, while sports operating income declined 17% to $858 million.
Operating cash flow rose 33% to $4.87 billion, and free cash flow totaled $3.07 billion during the quarter.
Domestic parks and experiences revenue increased 11% to $7.12 billion, while international parks revenue rose 6% to $1.79 billion.
Disney said it received about $100 million in tariff refunds and raised its fiscal 2026 share repurchase target to at least $9 billion from $8 billion. The increase follows the sale of its 50% stake in A+E Global Media to Hearst, which is expected to generate about $1.2 billion in cash.
The company also said it will transfer much of its consumer products business from the experiences segment to the entertainment division beginning in fiscal 2027 to better align merchandise with its film and television franchises.
Separately, Disney announced a global partnership with TikTok to bring curated Disney-themed fan content to the platform as it seeks to engage younger audiences.
Walt Disney Outlook
Disney reiterated its fiscal 2026 outlook for adjusted EPS growth of about 12%, excluding the impact of the 53rd week.
Including the additional week, the company now expects adjusted EPS growth of about 16%, resulting in adjusted EPS of about $6.64. The updated EPS outlook remains below the analyst consensus estimate of $6.81.
The company expects total segment operating income to reach approximately $4.9 billion in the fourth quarter.
For fiscal 2027, Disney reiterated its outlook for double-digit adjusted EPS growth, excluding the impact of the 53rd week.
DIS Price Action: Walt Disney shares were up 2.97% at $101.10 during premarket trading on Wednesday, according to Benzinga Pro data.
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