Disney reported better-than-expected earnings for its fiscal third quarter, driven by robust performance in its Experiences division and the box office success of "Toy Story 5." The Experiences segment, which encompasses theme parks, resorts, cruises, and merchandise, saw its revenue climb 8% to $9.09 billion. Operating income for this division increased 13% to $2.52 billion, with domestic parks alone seeing a 22% rise in operating income and a 10% increase in revenue to $6.4 billion. Walt Disney World, in particular, posted a record third quarter, and bookings for the fourth quarter are up 6%.
The company's overall revenue rose 2% to $22.76 billion, while net income more than doubled to $5.26 billion, or $2.92 per share. This strong showing led Disney to raise its full-year adjusted EPS forecast for fiscal 2025 to $5.85, up from its previous projection of $5.75 per share. Analysts had anticipated $5.80 per share.
The film "Toy Story 5" contributed significantly to Disney's results, grossing $335.3 million domestically and $623.1 million worldwide, placing it among the top films of 2026. This box office success, combined with the healthy demand at domestic parks despite macroeconomic uncertainties, bolstered investor confidence. Raymond James maintained an "outperform" rating but adjusted its price target for Disney shares to $111 from $119, still indicating a 15.4% upside from its last close. Disney's stock closed at $99.50 before the holiday break, up 3.96% for the day but only 0.7% for the week.
While domestic parks flourished, international parks and experiences saw a 3% decline in operating income, though revenue for international parks was up 6% to about $1.7 billion. Disney also announced plans to build a seventh theme park in Abu Dhabi, separate from its $60 billion investment pledge for existing parks. The Entertainment SVOD segment achieved its first double-digit operating margin in Q2 and aims for at least 10% for fiscal 2026, signaling strength in its streaming services.
Overall, Disney's diverse revenue streams, particularly the strong performance of its domestic theme parks and successful film releases like "Toy Story 5," have positioned the company positively, leading to raised earnings forecasts and a focus on expanding its global theme park and cruise line businesses.
