ii view: Disney ad revenues disappoint
Operating both traditional TV networks as well as streaming media via Disney Plus and launching a new cruise ship. We assess prospects for this entertainment mammoth.
14th November 2025 16:00
by Keith Bowman from interactive investor
Fourth-quarter results to 27 September
- Revenue down 0.5% to $22.46 billion
- Adjusted earnings down 3% to $1.11 per share
- Dividend of $1.50 per share
Guidance:
- Expects double-digit growth in adjusted earnings for the 2026 year ahead
Chief executive Robert Iger said:
“This was another year of great progress as we strengthened the company by leveraging the value of our creative and brand assets and continued to make meaningful progress in our direct-to-consumer businesses.”
“Our strategy, coupled with our portfolio of complementary businesses and a strong balance sheet, enables us to continue investing in high-quality offerings for our consumers and increasing our returns to shareholders, and I’m pleased with our many achievements this fiscal year to position Disney for the future.”
- Invest with ii: Buy US Stocks from UK | Most-traded US Stocks | Cashback Offers
ii round-up:
The Walt Disney Co (NYSE:DIS) reported sales that marginally missed Wall Street forecasts and a fall in quarterly earnings, hindered by lower ad sales at its linear, or traditional TV networks.
Fourth-quarter sales to late September retreated 0.5% to $22.46 billion, with a 16% fall in linear TV revenues countered by an 8% rise in direct-to-consumers or streaming revenues. Analysts had expected an outcome of $22.75 billion. Adjusted earnings fell 3% from a year ago to $1.11 per share, although that beat forecasts for $1.05 per share.
Shares in the Dow Jones company fell 6% in post results US trading having come into these latest results up around 3% so far in 2025. The Dow Jones index is up 11% year-to-date. Netflix Inc (NASDAQ:NFLX) has gained more than a quarter during that time.
Disney operates across the three divisions of Entertainment, Sports and Experiences or theme parks. Falling revenues for linear TV helped drag sales for the wider Entertainments division down 6% from a year ago to $10.2 billion.
Disney remains in a dispute with YouTube and its owner Alphabet Inc Class A (NASDAQ:GOOGL) regarding contracts and costs for the showing of its linear TV networks such as ABC and ESPN on YouTube.
Sales for the Experiences division, aided by the launch of the new Disney Treasure cruise ship, rose 6% to $8.76 billion. Sports divisional revenues climbed 2% to $3.98 billion.
Disney forecast double-digit growth in adjusted earnings for the year ahead. A declared dividend of $1.50 per share is to be paid in two instalments of $0.75 per share to eligible shareholders on January 15 and July 22.
Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares post the results.
ii view:
Started as an animation studio in 1923, Disney brands today include Pixar, Marvell Studios, Lucasfilm, ABC News, and Entertainment and Sports Programming Network or ESPN. Experiences or theme parks and cruises generated its biggest slug of profits over this latest 2025 financial year at 57%. That was followed by Entertainment at 27% and Sports the balance of 16%.
For investors, exposure to economically sensitive advertising is not to be ignored. Income-squeezed consumers can cut subscription-based TV in tough economic times. A previous return to the former head Robert Iger raises questions and uncertainty over future leadership, while a forecast dividend yield of around 1% sits below Sky owner Comcast Corp Class A (NASDAQ:CMCSA) and ITV (LSE:ITV) each at over 4%.
- ii view: Buffett builds Berkshire Hathaway cash pile to record high
- Tapping the AI boom beyond the US
- Outlook for 2026: why more records could be broken
More favourably, Disney’s diversity of operations regularly sees positives for one division countering challenges for another. Growth in streaming revenues continues to be achieved. A focus on improving group efficiency has been underlined by Mr Iger, while the group’s brand strength is strong.
On balance, and despite ongoing risks, a consensus analyst estimate of fair value above $130 per share appears to suggest continued longer-term optimism on Wall Street.
Positives:
- Geographical diversity, strong brands, and media content bank
- Focus on costs
Negatives:
- Cost pressured consumers may cut entertainment spending
- Intense competition
The average rating of stock market analysts:
Buy
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.