ii view: Disney details mixed results
This titan of the entertainment world is big in sports programming and has made moves to bolster its position. We assess prospects.
6th August 2025 15:44
by Keith Bowman from interactive investor
Third-quarter results to 28 June
- Revenue up 2% to $23.65 billion
- Adjusted earnings up 16% to $1.61 per share
Guidance:
- Now expects full-year adjusted earnings to rise around 18% to $5.85 per share, up from a previous estimate of 16% to $5.75.
Chief executive Robert Iger said: “We are pleased with our creative success and financial performance in Q3 as we continue to execute across our strategic priorities.
“With ambitious plans ahead for all our businesses, we’re not done building, and we are excited for Disney’s future.”
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ii round-up:
The Walt Disney Co (NYSE:DIS) today detailed better-than-expected profits but with revenues hindered by falling traditional or linear TV-related demand.
Third-quarter sales to late June rose 2% to $23.65 billion (£17.7 billion), aided by 6% growth in streaming services to $6.2 billion although slowed by a 15% fall in linear TV revenues to $2.27 billion.
Earnings, and helped by a 1% cut in costs and expenses, rose 16% from a year ago to $1.61 per share. Wall Street had forecast sales of $23.75 billion and earnings of $1.47 per share.
Shares for the Dow Jones company fell 2% in early US trading having come into these latest results down by close to a fifth so far in 2025. That’s ahead of a near 4% gain for the Dow index itself. Shares for pure streamer Netflix Inc (NASDAQ:NFLX) are up 29% year-to-date.
Disney operates across the three divisions of Entertainment, Sports and Experiences or theme parks. The California-headquartered Disney is soon to launch a sports-focused ESPN streaming service in conjunction with the National Football League or NFL.
Management now expects full-year adjusted earnings to rise around 18% to $5.85 per share, up from a previous estimate of 16% to $5.75.
Disney recently agreed a deal with the NFL to acquire its network and other media assets in exchange for the NFL taking a 10% equity stake in Disney’s ESPN sports network.
Disney is also planning to integrate the group’s Hulu TV offering into its Disney Plus service as well expanding some existing theme parks.
Fourth-quarter results are likely to be announced in early November.
ii view:
Began in 1923, Disney brands now include Pixar, Marvel Studios, Lucasfilm, ABC News, and Entertainment and Sports Programming Network, or ESPN. Experiences or theme parks and cruises generated its biggest slug of profits during the fiscal year 2024 at 59%. That was Entertainment at 25% and Sports the balance of 16%. Geographically, the Americas made most sales during 2024 at 79%, followed by Europe at 11% and Asia Pacific the balance of 10%.
For investors, income-squeezed consumers can cut subscription-based TV in tough economic times. Exposure to economically sensitive advertising is not to be ignored. Costs for the group’s Sports division have risen as rivals such as Netflix and Amazon.com Inc (NASDAQ:AMZN) Prime also compete to air live events. A return to the helm by former head Robert Iger raises questions and uncertainty over future leadership, while an estimated forward dividend yield of around 1% sits below Sky owner Comcast Corp Class A (NASDAQ:CMCSA) at around 4% and ITV (LSE:ITV) at around 6%.
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To the upside, Disney’s diversity of operations regularly sees positives for one division countering challenges for another. Growth in streaming customer numbers is still being achieved. A focus on improving group efficiency has been underlined by Iger, while the group’s brand strength is strong.
For now, and despite ongoing risks, a consensus analyst estimate of fair value sat at over $130 per share appears to point to continued 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
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