Disney reports $25.17 billion Q3 revenue, sells A+E stake for $1.2 billion

Disney reported better-than-expected fiscal third-quarter earnings on Wednesday, with adjusted earnings per share hitting $2.06, surpassing analysts' predictions of $1.86. The company's revenue rose 7% year-over-year to $25.17 billion, slightly below the forecast of $25.38 billion. Following the announcement, Disney's stock jumped over 4% in premarket trading, signaling renewed investor confidence.

This earnings report marks the second under CEO Josh D'Amaro, who took the helm in March. Wall Street analysts were eager to see if the company could regain some of its lost value, as Disney's stock has dropped 17% over the past year. D'Amaro noted in his remarks that the company believes its shares are undervalued and emphasized a proactive approach to share repurchases, raising their buyback target from $8 billion to $9 billion this year. This plan will be bolstered by the recent decision to sell its 50% stake in A+E Global Media, generating $1.2 billion from the divestment.

Operating income for the quarter reached $5.6 billion, up from $4.6 billion a year ago. Disney's theme parks played a significant role in driving results, with attendance at U.S. parks increasing 3% and overall global guest numbers rising by 4%. The parks segment generated $9.97 billion in revenue, a 10% increase from last year, fueled by higher spending per customer on admissions, food, and merchandise. Despite some challenges with international attendance, the company believes these headwinds are easing.

Disney's entertainment division also saw growth, albeit below expectations, with revenue climbing 6% to $11.3 billion. The success of "Toy Story 5," which grossed over $1 billion globally, contributed to this growth. Disney continues to forecast a 12% growth in adjusted earnings by 2026 and a double-digit increase in 2027. As the company navigates a complex economic landscape, these results may signal a turning point in its financial recovery and growth strategy.