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Why Is Disney (DIS) Up 2.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Walt Disney (DIS - Free Report) . Shares have added about 2.4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Disney due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for The Walt Disney Company before we dive into how investors and analysts have reacted as of late.
Disney Q3 Earnings Surpass Estimates, Revenues Increase Year Over Year
The Walt Disney Company reported third-quarter fiscal 2026 adjusted earnings of $2.06 per share, up 28% year over year, beating the Zacks Consensus Estimate of $1.88 by 9.6%.
Revenues of $25.25 billion rose 7% year over year, missing the consensus mark of $25.48 billion by 0.9%.
Strong growth in the Experiences business and a sharp improvement in the Entertainment segment supported earnings growth.
DIS Entertainment Segment Delivers Strong Profit Growth
Entertainment revenues (44.9% of total revenues) increased 6% year over year to $11.35 billion. Subscription and affiliate fees increased 12% to $7.55 billion, while advertising revenues declined 1% to $1.63 billion. Content sales revenues decreased 6% to $1.6 billion.
Entertainment segment operating income surged 64% year over year to $1.68 billion. The improvement reflected higher subscription and affiliate fee revenues, while total costs and expenses remained essentially flat as lower selling, general and administrative expenses offset increases in programming, technology and depreciation costs.
Disney Streaming Business Continues to Improve
Entertainment SVOD revenues increased 11% year over year to $5.53 billion. Subscription revenues rose 15% to $4.72 billion, while advertising revenues increased 3% to $851 million.
Entertainment SVOD operating income more than doubled to $712 million from $329 million in the year-ago quarter. Subscription revenue growth was driven by more subscribers, improved pricing and favorable foreign exchange. Disney also highlighted lower Disney+ churn, continued Hulu integration and plans to introduce additional membership features beginning in spring 2027.
DIS Sports Business Faces Cost Headwinds
Sports revenues (17.8% of total revenues) increased 4% year over year to $4.5 billion. Subscription and affiliate fees rose 8% to $3.14 billion, while advertising revenues increased 5% to $1.2 billion. Other revenues declined 41% due to the absence of Ultimate Fighting Championship pay-per-view revenues recorded in the prior-year quarter.
Sports segment operating income declined 17% year over year to $858 million. Higher contractual programming costs, new sports rights costs, the timing of NBA rights cost recognition under renewed contracts and increased sales and marketing expenses weighed on profitability. Management also cited early NBA playoff sweeps and a network carriage dispute as additional headwinds during the quarter.
Disney Experiences Business Leads Growth
Experiences revenues (39.5% of total revenues) increased 10% year over year to $9.97 billion. Segment operating income increased 20% year over year to $3.02 billion, making it the strongest-performing business during the quarter.
Domestic parks and experiences benefited from higher guest volumes, stronger per-capita spending and contributions from the expanded Disney Cruise Line fleet. Consumer Products revenues increased 7% year over year, supported by merchandise sales related to Toy Story 5 and Star Wars: The Mandalorian and Grogu. The company also recorded an approximately $100 million tariff refund, which contributed roughly four percentage points to Experiences operating income growth.
Balance Sheet and Cash Flow
As of June 27, 2026, cash and cash equivalents totaled $5.19 billion, down from $5.68 billion as of March 28, 2026. Current borrowings declined sequentially to $8.63 billion from $8.89 billion, while long-term borrowings decreased to $37.41 billion from $38.47 billion.
During the third quarter, cash provided by operating activities increased 33% year over year to $4.87 billion, while free cash flow increased 63% year over year to $3.07 billion.
Disney’s Q4 and Fiscal 2026 Outlook
For the fourth quarter of fiscal 2026, Disney expects total segment operating income of approximately $4.9 billion, including the benefit of the 53rd week. For fiscal 2026, the company reiterated adjusted earnings growth of approximately 12%, excluding the 53rd week, or approximately 16% including it. Disney also raised its fiscal 2026 share repurchase target to at least $9 billion from at least $8 billion and continues to expect double-digit adjusted earnings growth in fiscal 2027.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Disney has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Disney has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Disney belongs to the Zacks Media Conglomerates industry. Another stock from the same industry, Paramount Skydance (PSKY - Free Report) , has gained 21.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Paramount Skydance reported revenues of $6.91 billion in the last reported quarter, representing a year-over-year change of -3.9%. EPS of $0.18 for the same period compares with $0.29 a year ago.
Paramount Skydance is expected to post earnings of $0.22 per share for the current quarter, representing a year-over-year change of 0%. Over the last 30 days, the Zacks Consensus Estimate has changed +20.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Paramount Skydance. Also, the stock has a VGM Score of C.
View the Zacks #1 Rank List
Image: Bigstock
Why Is Disney (DIS) Up 2.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Walt Disney (DIS - Free Report) . Shares have added about 2.4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Disney due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for The Walt Disney Company before we dive into how investors and analysts have reacted as of late.
Disney Q3 Earnings Surpass Estimates, Revenues Increase Year Over Year
The Walt Disney Company reported third-quarter fiscal 2026 adjusted earnings of $2.06 per share, up 28% year over year, beating the Zacks Consensus Estimate of $1.88 by 9.6%.
Revenues of $25.25 billion rose 7% year over year, missing the consensus mark of $25.48 billion by 0.9%.
Strong growth in the Experiences business and a sharp improvement in the Entertainment segment supported earnings growth.
DIS Entertainment Segment Delivers Strong Profit Growth
Entertainment revenues (44.9% of total revenues) increased 6% year over year to $11.35 billion. Subscription and affiliate fees increased 12% to $7.55 billion, while advertising revenues declined 1% to $1.63 billion. Content sales revenues decreased 6% to $1.6 billion.
Entertainment segment operating income surged 64% year over year to $1.68 billion. The improvement reflected higher subscription and affiliate fee revenues, while total costs and expenses remained essentially flat as lower selling, general and administrative expenses offset increases in programming, technology and depreciation costs.
Disney Streaming Business Continues to Improve
Entertainment SVOD revenues increased 11% year over year to $5.53 billion. Subscription revenues rose 15% to $4.72 billion, while advertising revenues increased 3% to $851 million.
Entertainment SVOD operating income more than doubled to $712 million from $329 million in the year-ago quarter. Subscription revenue growth was driven by more subscribers, improved pricing and favorable foreign exchange. Disney also highlighted lower Disney+ churn, continued Hulu integration and plans to introduce additional membership features beginning in spring 2027.
DIS Sports Business Faces Cost Headwinds
Sports revenues (17.8% of total revenues) increased 4% year over year to $4.5 billion. Subscription and affiliate fees rose 8% to $3.14 billion, while advertising revenues increased 5% to $1.2 billion. Other revenues declined 41% due to the absence of Ultimate Fighting Championship pay-per-view revenues recorded in the prior-year quarter.
Sports segment operating income declined 17% year over year to $858 million. Higher contractual programming costs, new sports rights costs, the timing of NBA rights cost recognition under renewed contracts and increased sales and marketing expenses weighed on profitability. Management also cited early NBA playoff sweeps and a network carriage dispute as additional headwinds during the quarter.
Disney Experiences Business Leads Growth
Experiences revenues (39.5% of total revenues) increased 10% year over year to $9.97 billion. Segment operating income increased 20% year over year to $3.02 billion, making it the strongest-performing business during the quarter.
Domestic parks and experiences benefited from higher guest volumes, stronger per-capita spending and contributions from the expanded Disney Cruise Line fleet. Consumer Products revenues increased 7% year over year, supported by merchandise sales related to Toy Story 5 and Star Wars: The Mandalorian and Grogu. The company also recorded an approximately $100 million tariff refund, which contributed roughly four percentage points to Experiences operating income growth.
Balance Sheet and Cash Flow
As of June 27, 2026, cash and cash equivalents totaled $5.19 billion, down from $5.68 billion as of March 28, 2026. Current borrowings declined sequentially to $8.63 billion from $8.89 billion, while long-term borrowings decreased to $37.41 billion from $38.47 billion.
During the third quarter, cash provided by operating activities increased 33% year over year to $4.87 billion, while free cash flow increased 63% year over year to $3.07 billion.
Disney’s Q4 and Fiscal 2026 Outlook
For the fourth quarter of fiscal 2026, Disney expects total segment operating income of approximately $4.9 billion, including the benefit of the 53rd week. For fiscal 2026, the company reiterated adjusted earnings growth of approximately 12%, excluding the 53rd week, or approximately 16% including it. Disney also raised its fiscal 2026 share repurchase target to at least $9 billion from at least $8 billion and continues to expect double-digit adjusted earnings growth in fiscal 2027.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Disney has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Disney has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Disney belongs to the Zacks Media Conglomerates industry. Another stock from the same industry, Paramount Skydance (PSKY - Free Report) , has gained 21.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Paramount Skydance reported revenues of $6.91 billion in the last reported quarter, representing a year-over-year change of -3.9%. EPS of $0.18 for the same period compares with $0.29 a year ago.
Paramount Skydance is expected to post earnings of $0.22 per share for the current quarter, representing a year-over-year change of 0%. Over the last 30 days, the Zacks Consensus Estimate has changed +20.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Paramount Skydance. Also, the stock has a VGM Score of C.