DIS: Disney Stock Slides Despite Earnings Beat, Doubled Profit — It’s the TV and Theatrical Units

Old-school TV biz didn’t match the growth of the streaming unit, or the parks unit. Still revenue came in just about in line with expectations.

🎢 Earnings Fly, but Shares Still Dip

• Disney stock DIS tumbled almost 4% in the first hours of Wednesday’s session after the company released earnings data shortly before the opening bell. It’s a mixed bag — let’s take a look.
• The entertainment giant posted adjusted earnings of $1.61 a share, topping estimates of $1.45. But revenue came in just short at $23.65 billion versus the $23.69 billion expected — close, but not close enough for Wall Street’s taste.
• Net income more than doubled to $5.26 billion, or $2.92 a share, up from $1.43 last year (thanks, Disneyflation?). The company raised full-year EPS guidance to $5.85, a notch above the $5.80 consensus, thanks to stronger performance in streaming and theme parks.

📺 TV Business Underperforms

• The linear networks division — ABC, FX, and other classic TV holdings — reported a 28% plunge in operating income to $697 million. Viewership is dropping, ad rates are falling, and the cord is looking very cut.
• Traditional TV is now the financial equivalent of a rerun. Disney said lower ad revenue and fewer eyeballs drove the decline. And despite cost-cutting, the segment continues to underperform.
• This isn't new: linear has been the laggard for several quarters now, and there's little optimism that a turnaround is near — especially with continued audience migration to streaming.

🎥 Theatrical Misses the Sequel

• The theatrical unit swung to an operating loss of $21 million, a sharp reversal from $254 million in profit during the same quarter last year. The reason? No Inside Out 2 blockbuster this time around.
• That Pixar sequel, released last year, became the highest-grossing animated film ever, beating out recent giants like Kung Fu Panda 4, Despicable Me 4, and Moana 2. Apparently, this quarter didn’t have the same fireworks.
• Licensing and home entertainment sales also cooled off, reflecting weaker content traction and a lull in release cycles. Translation: No big IP, no big payday.

🍿 Bright Spots: Streaming and Parks

• Disney’s streaming business continued to grow, driven by subscriber gains and tighter cost controls. Guidance for the division was raised, with profitability in sight sooner than later.
• The experiences division (parks and resorts) saw higher guest spending and healthy attendance across the board. Consumers may be watching less TV, but they’re still buying $14 caramel popcorn at Disneyland.
• Both units are pulling their weight — and then some. It’s now up to them to balance out the legacy drag in TV and theatrical.