Disney Beats on Q3 Earnings, Bets Big on NFL: ETFs in Focus

Core Insights - The Walt Disney Company reported third-quarter fiscal 2025 results, beating earnings estimates but missing revenue expectations, leading to a nearly 3% drop in shares [1] - Disney announced a strategic acquisition of key assets from the National Football League, which is expected to impact ETFs heavily invested in the company [2][7] Earnings Performance - Earnings per share reached $1.61, surpassing the Zacks Consensus Estimate of $1.46, and reflecting a 15.8% increase year-over-year [3] - Revenues increased by 2.1% year-over-year to $23.6 billion, but fell short of the Zacks Consensus Estimate of $23.67 billion [3] Streaming Business Growth - The streaming segment showed continued growth, with Disney+ and Hulu adding 183 million subscriptions, an increase of 2.6 million from fiscal Q2 [4] - Disney+ alone gained 128 million subscribers, up 1.8 million from fiscal Q2 [4] - The company anticipates over 10 million new subscriptions for Disney+ and Hulu in the ongoing fiscal fourth quarter, primarily driven by Hulu's expanded Charter deal [5] Strategic Initiatives - Disney is confident in its strategic initiatives, including the integration of Hulu into Disney+ and global expansion of its parks and experiences, aiming for sustained growth [6] - The full-year earnings forecast was raised to $5.85 per share from $5.75, indicating an 18% year-over-year growth in earnings [6] NFL Acquisition Details - Disney's ESPN will acquire NFL Network, NFL RedZone, and NFL Fantasy in exchange for a 10% equity stake in ESPN, marking a significant shift in sports media [7] - ESPN will fully integrate NFL Network into its new direct-to-consumer streaming service, launching at $29.99 per month [8] - The deal includes airing three additional regular-season NFL games per year on NFL Network and streaming the 2026 Super Bowl on Disney+ for the first time [9] ETFs Impacted - Several ETFs with significant allocations to Disney include Vanguard Communication Services ETF (VOX), Communication Services Select Sector SPDR Fund (XLC), Fidelity MSCI Communication Services Index ETF (FCOM), Invesco S&P 500 Equal Weight Communication Services ETF (RSPC), and First Trust S-Network Streaming & Gaming ETF (BNGE) [2][10][11][12][13][14]