Financial Data and Key Metrics Changes - Adjusted EPS for fiscal 2025 increased by 19% compared to fiscal 2024, with a compound annual growth rate of 19% over the past three fiscal years [5] - The company expects double-digit adjusted EPS growth for fiscal 2026 compared to the prior year [5] - Free cash flow is anticipated to continue growing, allowing for increased capital returns to shareholders, including a target of $7 billion in share repurchases for 2026, double the $3.5 billion repurchased in fiscal 2025 [5][6] Business Line Data and Key Metrics Changes - The film studio segment achieved significant success, with Disney's live-action "Lilo & Stitch" being the highest-grossing Hollywood film globally for the year, and retail sales for the franchise exceeding $4 billion in fiscal 2025 [6][7] - The streaming business reported a 39% increase in operating income in Q4, totaling $1.3 billion for the full year, up $1.2 billion from the previous year [10] - The experiences segment delivered record operating income for both Q4 and the full year, with a 13% increase in Q4 compared to the prior year [12] Market Data and Key Metrics Changes - Viewership for television content was strong in Q4, with several series achieving significant milestones, including "Alien Earth" and "Dancing with the Stars" [9][10] - ESPN's direct-to-consumer service saw a positive response, with a 25% increase in viewership across ESPN networks [12] Company Strategy and Development Direction - The company is focusing on integrating its streaming services into a unified app experience, enhancing user engagement and simplifying access to content [11][42] - Strategic investments are being made in international markets and original content to expand the direct-to-consumer business [11] - The company plans to continue expanding its cruise line and theme park offerings, with new ships and attractions set to launch [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strategy, highlighting the successful launch of ESPN's direct-to-consumer service and its positive impact on subscriber engagement [20][22] - The company is optimistic about its film slate for the upcoming year, including highly anticipated titles like "Zootopia 2" and "Avatar: Fire and Ash" [35][36] - Management acknowledged the competitive landscape but emphasized the strength of Disney's existing IP portfolio and its strategic positioning [53] Other Important Information - The board declared a cash dividend of $1.50 per share, a 50% increase from the previous year [6] - The company is exploring opportunities to leverage generative AI for enhancing consumer engagement and operational efficiencies [82][84] Q&A Session Summary Question: Insights on ESPN's direct-to-consumer launch - Management reported strong adoption and engagement, with a significant number of new users signing up for the service and positive feedback on app features [20][22] Question: Content growth outlook for the studio - Management is optimistic about the upcoming film slate and expects strong performance, particularly with major releases scheduled for the holiday season [35][36] Question: Advertising outlook for fiscal 2026 - Management anticipates advertising growth despite challenges, with improvements in CPMs noted over the last two quarters [54] Question: Demand trends for parks and cruises - Bookings for parks are up 3% in the first quarter, and demand for cruises remains strong, with high guest satisfaction scores [60][72] Question: Role of generative AI in content licensing and production - Management is engaged in discussions with AI companies to protect IP while exploring opportunities for efficiency and consumer engagement [82][84]

Core Insights - ESPN's direct-to-consumer streaming service launched in August has been a significant success, with 80% of new sign-ups opting for the Trio Bundle that includes Disney+ and Hulu [1][3] - In the fiscal fourth quarter, Disney added over 12 million subscribers, reaching a total of 196 million, with ESPN drawing 2.1 million sign-ups from its launch through September 30 [2] - The strong uptake of the Trio Bundle is seen as a positive indicator for reducing future churn rates [3] Subscriber Growth - Disney's streaming service exceeded expectations by adding more than 12 million subscribers in the fourth quarter, bringing the total to 196 million [2] - ESPN's new streaming outlet is not intended to be regularly reported on, as it complements the declining linear operations [2] User Engagement - The new service has performed exceptionally well with new users, including both former multichannel linear subscribers and new customers interested in ESPN [4] - Pay-TV subscribers have also engaged more deeply by authenticating their subscriptions to access programming via the ESPN app, with encouraging authentication rates reported [4] Features and Personalization - The app includes personalized features such as a tailored version of SportsCenter and TikTok-like vertical videos, with the algorithm effectively curating content based on user interactions [5]

Core Insights - Disney+ is exploring the integration of "game-like features" through artificial intelligence (AI), which could enhance user engagement and connect various segments of the company [1][2] - The investment in Epic Games for $1.5 billion is seen as a strategic move to directly compete with Netflix by incorporating gaming elements into Disney+ [2] - Disney is also venturing into user-generated content (UGC) to provide a more interactive experience for Disney+ users, allowing them to create and consume short-form content [3] AI Integration - AI is expected to transform Disney+ into a comprehensive portal for all Disney-related experiences, including commerce, theme parks, hotels, and cruises [4] - The company plans to leverage AI in three main areas: streaming technology, content post-production, and streamlining operations at theme parks [4] Financial Performance - Disney exceeded streaming expectations in its latest fiscal quarter, which helped mitigate challenges faced by its film studio and sluggish advertising sales [5] - CFO Hugh Johnston addressed ongoing issues related to Disney's carriage battle with YouTube TV, indicating potential impacts on revenue and subscriber growth [5]

The shares of Walt Disney Co (NYSE:DIS) are down 5.7% before the open. While adjusted fiscal fourth-quarter earnings of $1.11 per share topped estimates, revenue of $22.46 billion fell short of expectations. The company noted that while streaming service Disney+ added 3.8 million subscribers, ad revenue for its linear TV business continued to fall, and the YouTubeTV carriage spat looms large. Should these losses hold, DIS will mark its biggest single-day percentage drop since April and snap a four-day win s ...

Disney (NYSE: DIS) beat earnings expectations this morning but missed on revenue, a split result that underscores the tension between the company's recovery momentum and its struggle to grow the top line. ...

Core Insights - Disney's "experience" segment contributed over half of the company's profits in the last quarter [1] - The international theme parks, particularly Disneyland Paris, saw higher attendance and increased visitor spending, driving year-on-year revenue growth [1] - The cruise business benefited from an increase in cruise days, although revenue growth was partially offset by the costs associated with fleet expansion due to new ship construction [1]

Group 1: Economic Overview - The longest government shutdown in US history has ended, which had significant economic impacts, including halted food aid and unpaid federal workers [4][17] - Markets had been rising in anticipation of the shutdown's end, but there are concerns about the near-term economic outlook due to high prices affecting consumer spending [5][18] - Economists express worries about the economic direction, particularly regarding affordability issues for lower-income households [28][58] Group 2: Company Earnings - Disney reported Q4 revenue of $22.46 billion, missing estimates, but adjusted earnings per share of $1.11 exceeded expectations, with struggles in linear TV offset by parks and streaming strength [6] - Cisco's shares rose approximately 7% in pre-market trading due to strong demand for AI-driven equipment, benefiting from infrastructure spending [8] Group 3: Artificial Intelligence and Market Trends - AI is a major theme at the Invest 2025 event, with discussions on its impact on productivity and the labor market [14][49] - Concerns exist regarding the potential for a bubble in AI stocks, with some elements of overvaluation noted, particularly in foundational models [52][55] - The corporate mindset is currently focused on cost minimization rather than leveraging AI as a productivity enhancer [50] Group 4: Federal Reserve Insights - The Federal Reserve is facing pressure for reform, with discussions on the need for a more strategic and forward-looking approach to monetary policy [37][42] - There is a call for a change in the inflation target to a range rather than a fixed point estimate, reflecting current economic conditions [46] - The independence of the Fed is emphasized as crucial for effective policy-making, alongside the need for accountability and reform [44][58]

Core Insights - Walt Disney reported quarterly earnings of $1.11 per share, exceeding the Zacks Consensus Estimate of $1.03 per share, but down from $1.14 per share a year ago, representing an earnings surprise of +7.77% [1] - The company posted revenues of $22.46 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 1.72% and down from $22.57 billion year-over-year [2] - Disney has surpassed consensus EPS estimates four times over the last four quarters and topped revenue estimates twice [2] Earnings Outlook - The immediate price movement of Disney's stock will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.72 on revenues of $26.09 billion, and for the current fiscal year, it is $6.49 on revenues of $100.99 billion [7] Industry Context - The Media Conglomerates industry, to which Disney belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Disney's stock performance [5][6]

As you await these results, we always ask analysts like you, what are the things that you want to watch most closely for. So, what are you going to be watching most closely for. Well, >> I think there's there's three things.Um, the first is the market is a little bit nervous about a macroeconomic slowdown. And so, we we can't see any hints of that in in the experiences or formerly known as theme park segment. Second thing we need to see is is is reiteration of the double-digit adjusted earnings guide for fo ...

Core Viewpoint - The market is currently nervous about a potential macroeconomic slowdown, and there are specific indicators that analysts are closely monitoring regarding the company's performance and outlook [2][5]. Group 1: Key Indicators to Watch - The first key indicator is the absence of signs of a macroeconomic slowdown in the theme park segment [2]. - The second indicator is the need for the company to reiterate its double-digit adjusted earnings guidance for fiscal years 2026 and 2027 [2][5]. - The third indicator involves monitoring the direct-to-consumer (DTC) segment for any significant noise or disruptions, which could affect the overall narrative [2][3]. Group 2: Direct-to-Consumer Segment Insights - The DTC segment is expected to see topline acceleration, primarily driven by the global expansion of Hulu [5]. - The company has indicated a target of double-digit operating income, which needs to be reaffirmed to maintain investor confidence [5]. - There are various challenges in the DTC segment, including disputes, global rollouts, price hikes, and the launch of ESPN Unlimited, which could create noise but may be temporary in nature [3][4]. Group 3: Long-term Opportunities and Market Perception - A significant long-term opportunity for the company lies in enhancing its DTC app to position itself as a substitute for traditional pay TV, a space currently dominated by Netflix [6]. - Historically, the company has traded at a premium to the S&P 500 but is now trading at a discount, primarily due to perceived weaknesses in topline growth [7]. - The market's support for capital investments in parks and content is crucial for driving topline growth, especially among American investors [8].