Adjusted earnings per share hit $1.57 as streaming and park revenues rise, signaling growth potential
Category: Business
Walt Disney Company reported a strong performance for its fiscal second quarter on May 6, 2026, exceeding Wall Street expectations with adjusted earnings per share of $1.57 and revenues of $25.2 billion. This marks the first earnings report under new CEO Josh D'Amaro, who took over from Bob Iger in March 2026.
The results, driven by growth in both the streaming and theme park divisions, helped lift Disney’s stock by more than 4% in premarket trading. Analysts had anticipated adjusted EPS of $1.49 and revenue of $24.78 billion. In total, Disney's operating income for the quarter increased to $4.6 billion, up from $4.4 billion a year earlier.
Josh D'Amaro, who previously led Disney's parks division, emphasized the company's commitment to growth in his first quarterly report as CEO. He noted that the company expects adjusted EPS growth for fiscal 2026 to reach about 12%, with projections for continued double-digit growth into fiscal 2027. "We see a substantial opportunity to engage and entertain our fans more deeply in both digital and physical environments," D'Amaro stated.
Disney's experiences division, which encompasses parks and cruise lines, reported a 5% increase in operating income but faced a decline in revenue, falling to $9.5 billion from a record $10 billion in the previous quarter. The company attributed this dip to a 1% decrease in attendance at its US parks, even as spending per customer rose by 5%. D'Amaro expressed optimism, saying, "Current demand at Disney's U.S. theme parks is healthy," and he anticipates attendance will improve in the third quarter compared to last year.
The earnings announcement comes at a time when Disney is grappling with a shifting market as consumers increasingly turn to streaming services. The company’s streaming segment, which includes Disney+ and Hulu, saw operating income rise significantly, with projections indicating a year-over-year increase of over 50% to about $525 million. This growth is part of a broader trend within the entertainment industry as companies adapt to changing consumer behaviors.
In his 10-page letter to shareholders, D'Amaro outlined a long-term strategy that focuses on investing in intellectual property, enhancing customer reach, and leveraging advanced technologies to boost storytelling and monetization. This strategy is particularly relevant as the entertainment sector faces challenges from rising operational costs and competition.
Disney's sports division, which includes ESPN, reported a 5% decrease in operating income to $652 million, attributed to higher sports rights and production costs. This decline highlights the economic pressures facing the sports broadcasting industry, which has been under scrutiny as costs continue to rise.
Looking ahead, Disney plans to invest significantly in content and technology to drive future growth. D'Amaro's leadership will be closely watched as he implements these strategies to navigate the current economic climate marked by rising oil prices and consumer uncertainty. Analysts are particularly interested in how Disney will balance its investments in traditional media with the growing demand for streaming content.
Disney has also announced a reevaluation of its planned investment in OpenAI after the latter shut down its AI video-generation tool, Sora. This decision reflects the company's cautious approach in a rapidly changing technological environment. As D'Amaro continues to steer the company, he will likely focus on innovation and adapting to the latest trends in media and entertainment.
As Disney prepares for the remainder of the fiscal year, the company will be aiming to maintain momentum in its key divisions, particularly as it anticipates improved attendance at its parks and continued growth in streaming revenues. The next earnings report will provide additional insights into how effectively D'Amaro's strategies are taking shape.
In a competitive media environment, Disney's ability to adapt and innovate will be key to its success, with the next fiscal quarter set to reveal the effectiveness of its new initiatives and strategies.