Disney stock plunges as Q4 revenue misses estimates amid linear TV pressures
Disney (DIS) stock plunged more than 8% Thursday after the company reported mixed fourth quarter results on Thursday as continued declines in its linear TV business offset strength in parks and streaming
Disney reported revenue of $22.46 billion for the quarter, missing analyst expectations of $22.83 billion and coming in roughly comparable to the year-earlier period.
A 6% revenue drop within the company's entertainment division, which includes its streaming, TV, and theatrical businesses, contributed to the top-line miss. Linear network revenue fell 16% year over year, while operating income dropped 21% as cord-cutting accelerated and ad dollars continued to shift toward streaming.
The results came in the final stretch of CEO Bob Iger’s turnaround ahead of his planned departure next year.
The company said the decline in operating income was driven in part by the sale of its Star India assets, which contributed $84 million to results a year ago. Domestic linear networks also came under pressure from lower advertising tied to weaker viewership and a $40 million decline in political ad spending compared to the prior-year quarter.
Disney also faced weaker theatrical comparisons in the period, adding to the drag on overall Entertainment results.
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Adjusted earnings per share (EPS) of $1.11 for the quarter came in ahead of the $1.07 expected by analysts polled by Bloomberg. Earnings fell 3% from $1.14 a year ago.
Still, for full-year 2025, the company reported adjusted EPS of $5.93, a 19% year-over-year jump and ahead of both its own guidance and Wall Street's $5.87 projection.
Disney said it expects fiscal 2026 to deliver double-digit adjusted EPS growth from 2025. The company also expects to double its share repurchase target to $7 billion next year.
Additionally, the company announced a $0.50 increase in its cash dividend to $1.50.
Streaming gains, parks strength
On the streaming front, Disney+ added 3.8 million subscribers in the quarter, ahead of the 2.4 million that analysts polled by Bloomberg had expected.
The direct-to-consumer segment, which includes Disney+ and Hulu, posted a profit of $352 million, compared to $253 million a year ago. The company continues to prioritize consistent profitability in streaming amid the ongoing shift away from traditional pay-TV.
Disney is targeting approximately $375 million in streaming profits for Q1 2026, with plans to merge Disney+ and Hulu next year. In fiscal 2025, the company achieved its target of securing $1.3 billion in streaming operating income, reporting $1.33 billion for the full year.
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