Core Viewpoint - Disney shares have declined to attractive levels despite solid revenue growth, primarily due to CEO Bob Iger's impending departure [1] Financial Performance - Overall revenue increased by 5% to $26 billion, surpassing the consensus estimate of $25.74 billion [2][5] - Adjusted earnings per share (EPS) fell by 7% to $1.63, exceeding the consensus of $1.57 [2] - Segment operating income decreased by 9% to $3.7 billion [5] Segment Analysis - **Entertainment Segment**: Revenue rose by 7% to $11.6 billion, but operating income fell by 35% to $1.1 billion due to higher programming and marketing costs [3][5] - **Streaming Segment**: Revenue increased by 11% to $5.3 billion, with operating income soaring by 72% to $450 million [3][5] - **Sports Segment**: Revenue edged up by 1% to $4.9 billion, while operating income dropped by 23% to $191 million, impacted by the loss of a carriage deal with YouTube TV [4][5] - **Experiences Segment**: Revenue and operating income both grew by 6% to $10 billion and $3.3 billion, respectively [3][5] Future Projections - For fiscal 2026, Disney anticipates double-digit adjusted EPS growth and double-digit operating income growth in the entertainment sector [5] - Low-single-digit operating income growth is expected for the sports segment, while high-single-digit growth is projected for the experiences segment [5] - Continued double-digit EPS growth is projected for 2027 [5] Strategic Developments - Disney's streaming services are performing well, with expectations that the combination of Disney+ and Hulu will enhance engagement and reduce churn [7] - The new ESPN Unlimited app is showing strong early adoption [7] - Theme parks are performing well, with significant expansions planned, including the addition of Frozen Land at Disneyland Paris and new cruise line developments [8] Valuation - The stock is trading at a forward price-to-earnings (P/E) ratio below 16, which is considered attractive given the expected double-digit EPS growth over the next two years [9]

Core Insights - The recent carriage rights dispute between YouTube TV and Disney's ESPN resulted in a 15-day programming blackout, marking the longest such standoff in Disney's history with a streaming service provider [3][5] - FuboTV, a smaller player in the live TV streaming market, may have benefited from the outage, potentially gaining subscribers during this period [4][5][14] Industry Dynamics - Programming costs for major networks, especially in sports, are rising due to increasing league contract rates, with ESPN being the most expensive channel to carry [2] - The traditional cable and satellite TV market is shrinking, with only 36% of U.S. homes still subscribing to these services, while less than 20% are paying for live TV streaming [7] Company Performance - FuboTV had 1.63 million paid subscribers at the end of Q3, and the recent outage may have led to an influx of new customers from YouTube TV [9][10] - Despite the potential subscriber gain, Fubo's stock declined by 2% during the blackout period, indicating a missed opportunity in the market [4] Competitive Landscape - The merger between Disney's Hulu + Live TV and Fubo, which retains Disney a 70% stake, positions Fubo to better compete against YouTube TV [12][13] - With a combined total of 6 million live TV streaming subscribers, Fubo is now in a stronger position to challenge YouTube TV, which may be weakened after the recent dispute [14]