Shares in the Walt Disney Company tanked on Thursday after the entertainment giant reported fourth-quarter revenue that missed expectations, with a slate of movie releases that failed to energize audiences.
The entertainment giant’s $22.5 billion revenue for the quarter ended September 27 was roughly flat compared to the same period last year, sending its stock price down as much as 10 percent on Wall Street.
Despite the hit to revenue, Disney delivered strong profits in the quarter, driven by record theme park performance and continued growth in its streaming services.
Net income surged to $1.3 billion from $460 million a year earlier.
But analysts were rattled by the entertainment segment, where operating income fell $376 million to $691 million, weighed down by unfavorable comparisons to last year’s blockbuster releases “Inside Out 2” and “Deadpool & Wolverine.”
This quarter’s slate included “The Fantastic Four: First Steps,” “The Roses” and “Freakier Friday,” which failed to replicate the box office success of the prior year’s hits.
“Obviously not every film works…We’ve been around long enough to understand that,” Disney CEO Bob Iger told analysts.
Nevertheless, the CEO said he was “very optimistic” about the 2026 fiscal year, with several big-budget feature films in the pipeline, including “Zootopia 2,” “Avatar: Fire and Ash,” “Toy Story 5” and a live-action version of “Moana.”
Disney’s direct-to-consumer business provided a bright spot, with operating income rising $99 million to $352 million.
Six years after launching the Disney+ video-on-demand service, which suffered billions in losses during its early years, the group has turned it into a significant source of profit.
In the fourth quarter, Disney saw operating profit from streaming accelerate by 39 percent, partly thanks to price increases that customers seem willing to stomach. The company now boasts 196 million Disney+ and Hulu subscriptions combined.
Disney+ alone reached 132 million subscribers, up 3.8 million from the previous quarter, while international Disney+ subscribers grew four percent.
Disney’s theme parks segment posted record results, with operating income of $1.9 billion for the quarter, up $219 million year-over-year. Full-year operating income for the parks division reached a record $10 billion.
International parks showed particularly strong growth, with operating income rising 25 percent to $375 million, while domestic parks generated $920 million, up nine percent.
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