Walt Disney came up short of what Wall Street wanted to see on Thursday, and the stock took a beating for it. The company’s quarterly revenue numbers disappointed pretty much everyone watching, even though some parts of the business are actually doing well. The problem? That pesky cable TV unit just won’t stop bleeding, and all the solid growth happening over in streaming and theme parks can’t quite make up for it. Investors weren’t having it—shares tumbled more than 3.9% in premarket trading before most people even had their morning coffee.
Look, Disney pulled in $22.5 billion for the quarter ending in September. That’s the same as last year ago, which sounds fine until you remember that analysts were expecting $22.75 billion. Missing by a couple hundred million might not seem like much, but when you’re Disney, people notice. The entertainment giant is stuck in this weird spot where it’s trying to rebuild itself while parts of the old business model are actively falling apart.
Here’s something that’ll make your head spin: Disney posted adjusted earnings per share of $1.11, and that actually beat what people expected by 6 cents above the average LSEG estimate. So they did better than predicted on earnings. But here’s the kicker—it was still a 3% decline from where they were a year earlier. The media business is just that complicated right now. You can win and lose at the same time.
CEO Bob Iger decided this was a good moment to show some swagger. The board unveiled plans that should make long-term shareholders pretty happy. They’re cranking up the dividend by 50%, taking it from $1 a share all the way to $1.50 per share. And they’re not stopping there—they’re also going to double that share buyback plan to $7 billion for fiscal 2026. That’s real money going back to investors, which is Disney’s way of saying “we’ve got this, trust us.”
When Chief Financial Officer Hugh Johnston talked to Media folks about the results, he highlighted something pretty clever they pulled off. That new distribution deal they struck with Charter Communications—you know, the cable and broadband provider—is actually working. It’s helping them draw people who might’ve just cancelled their cable subscription straight into streaming instead. These kinds of partnerships might be how Disney survives the next few years without leaving too much money on the table.
Okay, now we’re getting to the good stuff. Earnings from the streaming business surged 39% to land at $352 million. Remember when everyone said Disney+ would never make money? Yeah, about that. They added 12.5 million subscribers between Disney+ and Hulu during the quarter, which pushed the total subscriber count to 196 million people. That’s a lot of households paying monthly fees.
And get this—when they dropped the Box office smash “Lilo & Stitch” onto Disney+, the thing absolutely exploded. It racked up 14.3 million views in just its first five days available. Johnston was clearly proud of that number when he brought it up, and he should be. It proves that Disney still knows how to create stuff people actually want to watch, and they’re getting better at funneling audiences to their streaming services.
But man, the flip side is ugly. The traditional television unit saw its income decline 21% down to $391 million. That’s not a gentle slope downward—that’s basically falling off a cliff. Television fees keep dropping, advertising revenue is in a continued slide, and there’s no bottom in sight yet. Even ESPN, which was supposed to be bullet-proof because sports fans are so loyal, well, it slipped too. That should worry anyone paying attention because if ESPN can’t hold the line, what can?
The entertainment division got hammered even worse. Operating income there slumped by more than a third, landing at $691 million. Why such a brutal drop? Simple—this year’s films just didn’t connect with audiences the way they needed to. They failed to come anywhere close to matching what last year’s hits did for them. Remember how massive “Inside Out 2” and “Deadpool & Wolverine” were? This year’s slate couldn’t touch that kind of success. You need those tentpole movies to work, and when they don’t, it shows up immediately in the numbers.
While television is busy imploding, Disney’s theme parks unit is doing exactly what it’s supposed to do—making enormous amounts of money. Profit rose in a big way, with the experiences unit posting operating income of $1.88 billion. That’s a 13% jump from a year ago, which is impressive for a business this mature and this big.
A big part of that growth came from something you might not immediately thihuntington-profit-soars-on-surging-interest-fees/nk about: more passenger days on Disney cruise ships. The company’s been building out its fleet pretty aggressively, and turns out people really want to take their families on these things. The expansion of the U.S. cruise ship business isn’t just some side project anymore—it’s becoming a legitimate growth driver. Plus, Disneyland Paris continues to perform well, showing that the international theme park attractions still have plenty of room to expand.
You have to understand, Disney has been remaking itself for years now, trying desperately to adjust to this industry-wide decline of traditional broadcast television. They’ve invested billions into theme parks, new cruise ships, digital platforms—you name it. The company is essentially working two jobs at once: managing the slow death of linear TV while simultaneously building whatever comes next. It’s exhausting to watch from the outside, so imagine actually doing it.
Bob Iger wasn’t supposed to be here. He left, enjoyed retirement for about five minutes, then came back to Disney in 2022 when things were getting messy. First thing he did? Undertook aggressive cost-cutting that saved the company billions of dollars. His current contract runs through the end of 2026, and the company has already said it will name his successor early next year. That looming transition casts a long shadow over everything happening right now.
“This was another year of great progress as we strengthened the company by leveraging the value of our creative and brand assets,” Iger said in the official statement that accompanied the earnings report. He made sure to call out the “meaningful progress in our direct-to-consumer businesses,” which is executive language for “streaming is finally starting to work like we hoped it would.”
The company projected they’ll hit double-digit adjusted EPS growth for both fiscal 2026 and fiscal 2027, sticking with what they said in their previous forecast despite missing on revenue this quarter. They’re betting they can manage through this traditional TV decline and emerge stronger. Whether Wall Street believes that story is another question entirely, and judging by how the stock reacted, there’s plenty of skepticism to go around.
The real test for Disney is whether they can execute this transition without destroying too much value in the process. Every single quarter, the cable TV business loses more revenue, which means streaming and theme parks have to run faster just to stay in place. It’s like trying to renovate your house while you’re still living in it—messy, expensive, and something always goes wrong.
That distribution deal with Charter Communications might actually be a template for how they survive this. If Disney can convert people leaving cable directly into streaming customers through smart partnerships with broadband providers, maybe they don’t lose as many people along the way. It’s not perfect, but it beats watching everyone just disappear into the internet without a trace.
The fact that they doubled the stock buyback to $7 billion and boosted the dividend tells you something important: management thinks the stock is cheap right now. They’re backing that belief with real money, which should give shareholders at least some confidence even when quarterly results miss expectations. Those projections for fiscal 2026 and 2027 assume they’ll execute this strategy basically perfectly, though, and that’s asking a whole lot in a media landscape that’s changing faster than anyone can really track.