Background and Context
Walt Disney Company experienced its worst single-day drop in stock value in seven months on Thursday, following the release of its third-quarter results. Although the company exceeded expectations in terms of profit, it failed to meet revenue projections due to challenges within its entertainment division. This division was affected by struggling television networks and a weak film slate.
Stock Performance
Disney’s stock prices fell by 7.75%, marking the largest daily decline since April 3, when they dropped by 9.2%. The stock closed on Thursday at $107.61, the lowest level since May.
Financial Results
During the quarter ending in September, Disney reported nearly $22.5 billion in revenue, which was lower than the same quarter in 2024. The decline was primarily due to a drop in the entertainment segment.
“Overall, we ended the year with a lot of momentum,” said Hugh Johnston, Disney’s CFO. Despite the decrease in revenue, the entertainment company projects double-digit growth in profits for 2025 and 2026.
Dividend and Share Repurchase Plans
Disney also announced plans to increase its dividend and double its share repurchase program for the fiscal year 2026. In the third quarter, entertainment revenue fell by 6%, totaling $10.21 billion, weighed down by linear television channels and underperforming film releases.
- Direct-to-consumer (streaming) revenue increased by 8%.
- Television channels experienced a 16% decline.
- Licensing and sales dropped by 26%.
Disney’s flagship streaming service, Disney+, added 3.8 million paid subscribers, reaching a total of 131.6 million. Hulu, which Disney fully acquired earlier this year, now has 64.1 million customers. Disney is integrating Hulu into its main Disney+ app.
