Disney exceeded most expectations in the second quarter due to strength in its streaming service and strong spending at U.S. theme parks that offset weak international tourism.
The Walt Disney Co. warned early this year that its theme parks division would likely see modest growth due in part to declining tourism from abroad.
International tourism in the U.S. has waned for a number of reasons after President Donald Trump’s return to the White House, including tariffs, a crackdown on immigrants, and repeated jabs at alliednations.
In the Experiences division, which includes Disney’s six global theme parks, its cruise line, merchandise and video game licensing, operating income climbed 5% to $2.62 billion and revenue hit $9.49 billion in the quarter. Operating income rose 5% at domestic parks, while operating income edged up 1% for international parks and Experiences.
However, overall attendance at U.S. parks declined 1% from the same time last year due to declining international tourism.
Disney said Wednesday that domestic parks and resorts are doing well, but that the company is aware that customers are facing heightened inflation and soaring energy prices. Disney expects year-over-year attendance at its U.S. parks to improve in the current quarter.
Shares jumped 8% Wednesday.
Chief Financial Officer Hugh Johnston said during Disney’s conference call that the company is not seeing any change in consumer behavior from elevated gas prices so far, but that the business remains mindful of economic conditions and can make adjustments if needed.
For the period ended March 28, Disney earned $2.25 billion, or $1.27 per share. A year earlier it earned $3.28 billion, or $1.81 per share.
Stripping out one-time gains and losses, earnings were $1.57 per share, easily beating the $1.49 that Wall Street expected, according to analysts polled by Zacks Investment Research.
The Burbank, California, company reported revenue of $25.17 billion, which was slightly above expectations.
Revenue for Disney Entertainment, which includes the company’s movie studios and streaming service, climbed 10%, while revenue for the Experiences division, rose 7%.
Disney is preparing for the release of several films, including “The Mandalorian & Grogu,”“Toy Story 5” and the live-action “Moana.”
“Franchise films like these strengthen our most strategic asset – our intellectual property – and help fuel our streaming, consumer products, experiences, and games businesses over years and generations,” CEO Josh D'Amaro and Johnston said in a joint statement.
D’Amaro succeeded Bob Iger as Disney’s CEO in March to become the 9th CEO of the 100 plus-year-old company after overseeing its theme parks, cruises and resorts since 2020.
Just over a month into the job he was facing a challenge that had tested Iger's later years with Disney: Clashes with Donald Trump.
Last week, Donald and Melania Trump both called for ABC to fire Jimmy Kimmel after he described the first lady as having “the glow of an expectant widow.” Disney owns ABC.
Kimmel made the comment before a man with a gun stormed the White House Correspondents’ Association dinner and Trump was spirited out of the room by the Secret Service.
Last year, Kimmel was suspended by ABC following a comment made by the late night talk show host about assassinated conservative leader Charlie Kirk, a decision encouraged by Trump’s FCC chairman, Brendan Carr. ABC later brought Kimmel back.
Disney still anticipates double-digit growth for fiscal 2027 adjusted earnings per share, excluding the impact of an extra week in the period.
FILE - In this Aug. 8, 2017, file photo, The Walt Disney Co. logo appears on a screen above the floor of the New York Stock Exchange. (AP Photo/Richard Drew, File)
