The Walt Disney Co. saw its stock increase after reporting earnings that exceeded estimates for the recent quarter. Growth in subscribers for its streaming service, Disney Plus, also topped analyst views, while the company announced plans for a new theme park in Abu Dhabi. This news comes as the entertainment industry considers potential impacts from new tariff plans on imported movies.
Disney reported earnings of $1.45 per share adjusted, an increase of 20%. Revenue rose 7% to $23.6 billion for the quarter ending in early 2025. This performance surpassed expectations from FactSet, which anticipated earnings of $1.19 per share on $23.09 billion in sales.
Entertainment revenue grew 9% to $10.68 billion. Within this segment, direct-to-consumer revenue increased 8% to $6.11 billion. Linear networks revenue declined 13% to $2.4 billion.
The number of Disney Plus subscribers reached 126 million, exceeding the 123.5 million view from FactSet. Hulu subscribers totaled 54.7 million, ahead of views for 54.1 million. ESPN subscribers declined 3% to 24.1 million, falling below estimates. Sports revenue increased 5% to $4.5 billion, partly due to higher ESPN Plus prices.
Experiences revenue rose 6% to $8.88 billion, surpassing FactSet expectations of $8.78 billion. Higher theme park attendance, increased passenger cruise days, and more occupied room nights contributed to the growth. Guest spending at theme parks also saw an increase. Consumer products revenue and operating income benefited from higher licensing, including the Marvel Rivals video game release.
Looking ahead, Disney expects a modest increase in Disney Plus subscribers in the next quarter. For the full year, the company forecasts a 16% rise in earnings to $5.75 per share adjusted, above FactSet views for $5.43 per share. Double-digit operating income growth is projected for the entertainment segment, with experiences operating income seen growing 6% to 8% and sports operating income expected to jump 18%.
Separately, Disney announced plans for a new theme park on Yas Island in Abu Dhabi. Miral will develop and build the resort, while Disney and the Imagineers will lead creative design and operational oversight. This will be Disney's seventh theme park destination and the first in the United Arab Emirates, a region accessible to a significant portion of the world's population within a four-hour flight.
The earnings report comes amid discussions regarding President Donald Trump's proposed tariffs on movies produced in foreign countries. President Trump has stated that U.S. movie production is declining due to foreign incentives and has authorized the Department of Commerce and U.S. Trade Representative to initiate a process for a 100% tariff. Analysts have expressed reservations about the proposal's feasibility and potential consequences, noting concerns it could harm the domestic industry and potentially lead to retaliatory tariffs from other nations.
Disney's stock rose 9% early Wednesday following the news, trading above its 50-day and 200-day moving averages after being down more than 17% year to date through Tuesday. Meanwhile, Warner Bros. Discovery, which reports earnings Thursday, saw its stock climb 1.5% early Wednesday.
CEO Bob Iger commented on the company's forward view in a release. "Overall, we remain optimistic about the direction of the company and our outlook for the remainder of the fiscal year."
