Why is Disney’s stock surging today?
Disney’s stock rose by more than 4% in early trading on Wall Street after the company beat profit forecasts for the third fiscal quarter. The positive results come amid efficiency efforts and cost-cutting, alongside renewed growth in the parks division and the entertainment giant’s streaming services.
Disney’s stock surged by more than 4% in early trading on Wall Street after the company beat profit forecasts for the third fiscal quarter. The positive reports come against the backdrop of efficiency efforts and cost-cutting, alongside renewed growth in the parks division and the entertainment giant’s streaming services. This is the second report under the new CEO, Josh D’Amaro, who took office in March and is working to rebuild investor confidence after a difficult year for the stock.
A major deal and share buyback
As part of a strategy of refocusing, Disney announced the sale of its stake in the media corporation A+E Global Media to Hearst for $1.2 billion. Following the sale, which includes well-known brands such as the History Channel and Lifetime, the company will increase the scope of its share buyback to $9 billion this year, compared with a previous target of $8 billion. CEO D’Amaro emphasized that, in the company’s assessment, the current share price is lower than its true value.
On the earnings front, Disney reported adjusted earnings per share of $2.06, significantly higher than analysts’ expectations of $1.86. The company’s revenue grew by 7% year-over-year in the comparable quarter and totaled $25.17 billion, slightly below market expectations. The company’s total operating profit recorded a solid increase and reached $3.65 billion, while in the current quarter Disney expects an operating profit of about $4.9 billion.
Tourists are returning to Disney parks
Disney’s Experiences and Parks division led the positive results in the quarter, with a 3% increase in the number of visitors to parks in the United States and a 4% increase in global guests. Segment revenues grew by 10% to $9.97 billion, mainly thanks to a 17% jump in vacation and resort revenues and a 10% increase in vacation cruise days. Visitors also spent more money, as average spending on tickets, food, and products rose by 3%.
The strong results come after a period of macroeconomic uncertainty, which led to a slight decline in the number of visitors in the previous quarter. Now, Disney is reaffirming its long-term forecasts and expects 12% growth in adjusted profit in 2026, and double-digit growth in 2027, signaling a recovery for the entertainment giant.
