Disney Reports Streaming Profit, Price Hikes to Come
Walt Disney stock is trading lower despite the entertainment giant's beat-and-raise quarter and announcement of price hikes. Here's what you need to know.
Walt Disney (DIS) stock is trading modestly lower Wednesday despite the entertainment and media giant reporting higher-than-expected top- and bottom-line results for its fiscal third quarter and raising its full-year profit forecast.
In the quarter ended June 29, Disney's revenue increased 3.7% to $23.16 billion, driven by 4.5% growth in its Entertainment segment to $10.58 billion. Its earnings per share (EPS) were up 35% from the year-ago period to $1.39.
Disney's results were boosted by its direct-to-consumer (DTC) entertainment business, consisting of Disney+, Hulu and ESPN+, which combined to post a profit for the first time ever and one quarter ahead of the company's guidance.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Separately, Disney also announced price increases for these streaming services yesterday, according to CNBC. Beginning in mid-October, most Disney+, Hulu and ESPN+ plans will increase by $1 to $2 per month.
"Our performance in Q3 demonstrates the progress we've made against our four strategic priorities across our creative studios, streaming, sports, and Experiences businesses," said Disney CEO Bob Iger in a statement. "This was a strong quarter for Disney, driven by excellent results in our Entertainment segment both at the box office and in DTC, as we achieved profitability across our combined streaming businesses for the first time and a quarter ahead of our previous guidance."
The results beat analysts' expectations. Wall Street was anticipating revenue of $23.07 billion and earnings of $1.19 per share, according to CNBC.
For the second consecutive quarter, Disney raised its full-year profit forecast. The company now anticipates earnings-per-share growth of approximately 30%, up from its previous forecast of 25% growth.
Is Disney stock buy, sell or hold?
Disney is near the bottom of the pack this year as far as Dow Jones stocks go. Yet, Wall Street is bullish on shares. According to S&P Global Market Intelligence, analysts' average target price for DIS stock is $122.59, representing implied upside of nearly 40% to current levels. Additionally, the consensus recommendation is Buy.
Not everyone is as optimistic toward the blue chip stock, though. Financial services firm CFRA has a Hold rating on Disney stock with a $100 price target.
"We think a further strategic realignment may be needed in linear," wrote CFRA Research analyst Kenneth Leon in a July 23 note. "Cable pay TV, including ESPN and the ABC network, is a legacy unit that is losing advertising revenue and pay TV subscribers. Sports rights and the hefty offer to air the NBA should be called out on the earnings call."
Related Content
-
Dow Adds 292 Points as Goldman, Nvidia Soar: Stock Market TodayTaiwan Semiconductor's strong earnings sparked a rally in tech stocks on Thursday, while Goldman Sachs' earnings boosted financials.
-
Why Public Markets Don't Look Like They Used To -
Turning 65 in 2026? Here Is Exactly How to Sign Up for MedicareWhether you’re months away from your 65th birthday or plan to work past retirement age, here are the steps to secure your Medicare coverage and avoid costly mistakes.
-
Dow Adds 292 Points as Goldman, Nvidia Soar: Stock Market Today
Taiwan Semiconductor's strong earnings sparked a rally in tech stocks on Thursday, while Goldman Sachs' earnings boosted financials.
-
What's in Store for the Stock Market in 2026?Wall Street expects the bull market to keep running in the year ahead.
-
Is a Caregiving Strategy — for Yourself and Others — Missing From Your Retirement Plan?Millions of people over 65 care for grandkids, adult kids or aging parents and will also need care themselves. Building a caregiving strategy is crucial.
-
6 Financially Savvy Power Moves for Women in 2026 (Prepare to Be in Charge!)Don't let the day-to-day get in the way of long-term financial planning. Here's how to get organized — including a reminder to dream big about your future.
-
Private Equity Is Fundamentally Changing: What Now for Investors and Business Owners?For 40 years, private equity enjoyed extraordinary returns thanks to falling rates and abundant credit. That's changed. What should PE firms and clients do now?
-
Stocks See First Back-to-Back Losses of 2026: Stock Market TodayRising geopolitical worries and a continued sell off in financial stocks kept pressure on the main indexes on Wednesday.
-
I'm a Real Estate Expert: 2026 Marks a Seismic Shift in Tax Rules, and Investors Could Reap Millions in RewardsThree major tax strategies will align in 2026, creating unique opportunities for real estate investors to significantly grow their wealth. Here's how it works.
-
When Can Tax Planning Be an Act of Love? This Family Found OutHow can you give stock worth millions to a loved one without giving them a huge capital gains tax bill? This family's financial adviser provided the answer.
