Disney Beats Expectations With Record Parks And Streaming Growth

Disney kicked off 2026 with a bang, reporting earnings that outpaced Wall Street’s expectations and showcasing robust growth across its streaming and experiences businesses. Yet, even with these headline-grabbing numbers, investor sentiment remained mixed, as reflected in a dip in the company’s share price. The latest results highlight both Disney’s formidable strengths and the challenges it faces as it navigates a rapidly evolving entertainment landscape.

On February 2, 2026, Disney announced its fiscal first quarter results for the period ending December 27, 2025. The company posted adjusted earnings per share of $1.63, exceeding analyst forecasts of $1.57, and brought in $25.98 billion in revenue, beating the anticipated $25.62 billion, according to CNBC and Seeking Alpha. The strong performance was underscored by a 5% year-over-year increase in overall revenue, with the experiences segment—encompassing theme parks, resorts, and cruises—shattering records by generating over $10 billion in quarterly revenue for the first time.

Disney’s domestic theme parks were a particular bright spot, raking in $6.91 billion, up 7% from the prior year, while international parks also saw a 7% rise to $1.75 billion. CFO Hugh Johnston told CNBC, “In particular, Disney saw attendance rise at its domestic theme parks, while international visitation was softer.” The experiences division contributed $3.31 billion in profit, a 6% jump over the previous year, making it the company’s leading profit driver.

Streaming, too, showed impressive momentum. Revenue from Disney’s streaming business, which includes Disney+ and Hulu, climbed 11% to $5.35 billion in the quarter. Streaming margins improved to 12%, and Disney projects its streaming unit will generate about $500 million in operating income in the fiscal second quarter—roughly $200 million more than the same period last year. CEO Bob Iger emphasized the company’s progress in this area, stating during the earnings call, “We’ve made huge progress turning the streaming business into a profitable business, developing the technology tools to improve both the user experience and to improve results, and also developing programming across the globe.”

Despite these achievements, Disney’s net income for the quarter was $2.48 billion, or $1.34 per share, down from $2.64 billion, or $1.40 per share, a year earlier. The company attributed this dip to one-time items, including tax charges related to its deal with Fubo. And while the numbers impressed analysts, the market’s response was less enthusiastic: Disney’s shares fell 7% in early trading after the earnings release, and dropped 2.83% in pre-market trading to $109.61, as reported by Dow Jones and CNBC. This decline, despite the earnings beat, may reflect investor concerns over rising costs, particularly in the Sports and Entertainment units, as well as broader market volatility and questions about future growth prospects.

Disney’s entertainment division, which encompasses streaming and theatrical releases, reported operating income of $1.1 billion—a 35% decline from the prior year—despite a 7% increase in revenue to $11.61 billion. The company attributed the revenue boost to higher subscription and affiliate fees, as well as the inclusion of the Fubo transaction. However, the traditional TV networks continued to face headwinds, with the company ceasing to break out detailed figures for its linear TV networks, streaming, and theatrical businesses this quarter, following a trend set by Netflix last year.

On the sports front, Disney’s segment, now reported separately and anchored by ESPN, saw revenue rise 1% to $4.91 billion. However, operating income dropped 23% to $191 million, weighed down by increased programming and production costs stemming from new sports rights agreements and a decline in subscription and affiliate fees due to the loss of traditional bundle subscribers. The unit was also affected by a temporary blackout of Disney networks on YouTube TV during the fall, which cost the company about $110 million in operating income.

Looking ahead, Disney is aiming high. The company expects to repurchase $7 billion in stock in fiscal 2026 and projects double-digit growth in adjusted earnings per share. It’s also targeting 10% streaming margins and double-digit revenue growth, according to its latest guidance. Upcoming film releases—including "The Devil Wears Prada 2," "Toy Story 5," "The Mandalorian and Grogu," and a live-action "Moana"—are expected to further bolster the company’s content pipeline. Disney’s box office dominance continued in 2025, with "Zootopia 2" becoming Hollywood’s highest-grossing animated film ever and "Avatar: Fire and Ash" joining the billion-dollar club.

Innovation remains central to Disney’s strategy. The company recently announced a licensing agreement with OpenAI to introduce Sora-generated, short-form content on Disney+, marking a new era of AI integration. Iger highlighted the potential of artificial intelligence, stating, “We view AI as having... opportunities for creativity, productivity, and connectivity.” Disney is also expanding its sports portfolio, having closed a deal to acquire NFL media rights, including the linear rights to the league’s popular RedZone channel, which will further strengthen ESPN’s offerings.

Yet, challenges persist. Market volatility, the potential for streaming market saturation, economic uncertainties, and integration hurdles from recent acquisitions all loom as risks. Competition from other content creators and streaming platforms remains fierce. Moreover, Disney is facing rising costs in its Sports and Entertainment units, which could pressure margins in the quarters ahead.

Leadership transitions are also on the horizon. With CEO Bob Iger’s tenure nearing its end, the company’s board is expected to vote on his successor in the first quarter of 2026. Two of Iger’s deputies—Josh D’Amaro, chairman of Disney Experiences, and Dana Walden, co-chairman of Disney Entertainment—are seen as leading contenders. Iger expressed confidence in the company’s future, saying, “I also believe that in the world that changes as much as it does, that in some form or another, trying to preserve the status quo was a mistake, and I’m certain that my successor will not do that.”

Despite the headwinds, Disney’s underlying strengths are clear. Its theme parks, streaming platforms, and blockbuster franchises form a powerful ecosystem, while its willingness to embrace new technologies and business models positions it for continued growth. As Iger noted, “We have a great hand... We’re just going to continue to create our own [IP].” The coming months will test Disney’s ability to sustain its momentum—and prove whether its magic can weather the market’s shifting tides.