Disney’s fourth-quarter earnings show a company steadily transferring its weight from legacy broadcasting to high-growth digital content and physical experiences.
As its traditional entertainment channels continue to contract, growth from Disney+ and its theme parks provides the clearest path forward.
The quarter ending 30 September saw the firm report earnings per share of $1.11 on an adjusted basis, outperforming the $1.05 expected by analysts polled by LSEG.
Yet, total revenue reached $22.46 billion, falling short of forecasts set at $22.75 billion. Net income for the period was $1.44 billion or $0.73 per share, more than doubling the $564 million recorded a year earlier.
Digital gains as broadcasting slips
Disney’s entertainment division brought in $10.21 billion, marking a 6% annual decline. The drop stemmed primarily from underperformance across its linear TV channels and weak theatrical releases.
Operating income from the linear networks fell 21% to $391 million.
Meanwhile, streaming platforms showed strength. Operating income in that segment grew 39% to $352 million, largely due to recent price hikes across its digital services.
Disney+ alone added 3.8 million paid subscribers during the quarter, pushing its total to 131.6 million. Hulu reached 64.1 million users, bolstering Disney’s digital ecosystem.
This quarter also marks a strategic shift in investor reporting. The company confirmed that it would no longer disclose subscriber numbers or average revenue per user across its streaming platforms, aligning with Netflix’s approach from earlier in the year.
Advertising revenues continued to contract across ABC and FX, along with other Disney-owned TV assets.
The company also faced disruption from an ongoing carriage dispute with Google, which has kept Disney networks, including ESPN, off YouTube TV since 31 October.
ESPN maintains revenue under pressure
The sports segment, led by ESPN, generated roughly $4 billion in revenue, up 3% year-over-year. However, operating income was flat at $898 million.
Domestic profitability narrowed due to increased programming costs and investment in the new ESPN direct-to-consumer app, which launched in August.
This segment reflects a delicate balance. Traditional broadcasting remains significant, but digital consumption is increasing, forcing ESPN to absorb higher upfront costs in developing new digital platforms while still supporting existing infrastructure.
Physical experiences sustain momentum
Disney’s experiences division, encompassing parks, resorts, cruises, and consumer products, grew revenue by 6% to $8.77 billion. Operating income improved 13%, reaching $1.88 billion.
The cruise business drove much of the increase despite rising capital expenditure linked to fleet expansion. Disney expects another ship to join its cruise line later in November, further committing to experiential growth.
This segment continues to serve as a reliable profit engine. While media revenue fluctuates, the consistency of consumer demand at Disney’s parks and resorts provides stabilisation within its overall business.
Shifting fundamentals
The latest earnings outline a business model under strategic reallocation. Older segments such as linear television and cinema are in decline, not only in revenue but in structural relevance.
New media, comprising streaming and consumer travel experiences, now drives earnings growth and investor sentiment.
By consolidating Hulu into the Disney+ app and retiring granular streaming metrics, the company is preparing for a more integrated digital future.
Tom Rogers had identified this reporting shift as a key metric to watch ahead of the earnings release.
This internal consolidation echoes broader trends across the sector, where differentiation increasingly rests on content integration and pricing strategy, not subscriber counts.
While short-term revenue missed the mark, the strength of the earnings per share figure signals margin improvement and operational discipline in higher-growth verticals.
Disney’s ability to continue shifting focus while managing legacy decline will likely define its next fiscal cycle.
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