Disney warns of potentially long dispute with YouTube TV, shares fall

Core Insights - Walt Disney missed Wall Street revenue estimates for the quarter, primarily due to ongoing weakness in its cable TV unit, despite strong growth in streaming and theme parks, resulting in a share price drop of over 3.9% in premarket trading [1] Financial Performance - The company reported adjusted earnings per share of $1.11 for the fourth quarter ending in September, a 3% decline from the previous year but 6 cents above the average LSEG estimate [2] - Revenue for the quarter was $22.5 billion, comparable to the previous year but below the analyst forecast of $22.75 billion [5] - Operating income in the entertainment division fell by more than a third to $691 million, attributed to this year's films not matching the success of last year's hits [6] Growth Areas - Profit in Disney's theme parks unit increased, driven by the expansion of the U.S. cruise ship business and growth at Disneyland Paris [2] - Earnings from the streaming business surged 39% to $352 million, with the addition of 12.5 million subscribers to Disney+ and Hulu, bringing the total to 196 million [2] Strategic Initiatives - Disney announced plans to increase its dividend by 50% to $1.50 per share and to double its stock buyback plan to $7 billion for fiscal 2026 [5] - A new distribution deal with Charter Communications helped attract new streaming customers [3] - The company is undergoing a transformation to adapt to the decline of traditional broadcast and cable TV, investing in new attractions and cruise ships [4] Future Outlook - Disney forecasts double-digit adjusted EPS growth for fiscal 2026 and 2027, maintaining confidence despite the current challenges in television fees and advertising revenue [5][4]