The Walt Disney Company surpassed analyst predictions for its second quarter, with robust streaming services and domestic theme park performance helping to balance out a decrease in international tourist visits.
Back in February, Disney had warned investors that its Experiences segment, encompassing theme parks and resorts, would likely experience only modest profit increases during the second quarter, partly due to declining international visitor numbers to American destinations.
The reduction in foreign tourism to the United States has been linked to multiple factors, including Donald Trump’s presidency, trade tariffs, stricter immigration policies, and his controversial statements about potentially acquiring Canada and Greenland.
Disney’s Experiences segment, covering its six worldwide theme parks, cruise operations, merchandise sales, and video game licensing deals, saw operating profits increase 5% to $2.62 billion with revenues reaching $9.49 billion for the quarter. Domestic park operations saw a 5% boost in operating income, while international parks and experiences showed a more modest 1% increase.
Despite strong financial performance, U.S. park attendance dropped 1% compared to the previous year, primarily due to reduced international visitor numbers.
Company officials stated Wednesday that domestic parks and resort facilities continue performing well, though they acknowledge customers are dealing with inflation pressures and rising energy costs. Disney anticipates improved year-over-year attendance at its American parks during the current quarter.
For the quarter ending March 28, Disney reported earnings of $2.25 billion, equivalent to $1.27 per share. This compared to $3.28 billion, or $1.81 per share, during the same period last year.
When accounting for one-time items, adjusted earnings reached $1.57 per share, surpassing Wall Street’s anticipated $1.49 according to Zacks Investment Research analyst surveys.
The Burbank, California-based entertainment giant posted revenues of $25.17 billion, slightly exceeding market projections.
Disney Entertainment, encompassing film studios and streaming platforms, saw revenue grow 10%, while the Experiences division achieved 7% revenue growth.
The company is gearing up for upcoming film releases including “The Mandalorian & Grogu,” “Toy Story 5,” and a live-action “Moana” adaptation.
“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 Chief Financial Officer Hugh Johnston said in a statement.
D’Amaro was selected to replace Bob Iger as Disney’s chief executive in February, becoming the company’s ninth CEO in its century-plus history. Since 2020, he has managed the corporation’s theme park, cruise, and resort operations.
Disney continues to project double-digit growth for adjusted earnings per share in fiscal 2027, not including the impact of an additional week in that reporting period.
Disney stock prices climbed more than 4% in pre-market trading.
