Disney shares tumble as film flops hit revenue

SHARES in the Walt Disney Company tanked on Thursday after the entertainment giant reported fourth-quarter revenue that missed expectations, with a slate of movie releases that failed to energise audiences.

The entertainment giant’s US$22.5 billion revenue for the quarter ended Sep 27 was roughly flat compared to the same period last year, sending its stock price down as much as 10 per cent on Wall Street.

Despite the hit to revenue, Disney delivered strong profits in the quarter, driven by record theme park performance and continued growth in its streaming services.

Net income surged to US$1.3 billion from US$460 million a year earlier.

But analysts were rattled by the entertainment segment, where operating income fell US$376 million to US$691 million, weighed down by unfavourable comparisons to last year’s blockbuster releases Inside Out 2 and Deadpool & Wolverine.

This quarter’s slate included The Fantastic Four: First Steps, The Roses and Freakier Friday, which failed to replicate the box office success of the prior year’s hits.

“Obviously not every film works...We’ve been around long enough to understand that,” Disney CEO Bob Iger told analysts.

Nevertheless, the CEO said he was “very optimistic” about the 2026 fiscal year, with several big-budget feature films in the pipeline, including Zootopia 2, Avatar: Fire and Ash, Toy Story 5 and a live-action version of Moana.

Disney’s direct-to-consumer business provided a bright spot, with operating income rising US$99 million to US$352 million.

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Six years after launching the Disney+ video-on-demand service, which suffered billions in losses during its early years, the group has turned it into a significant source of profit.

In the fourth quarter, Disney saw operating profit from streaming accelerate by 39 per cent, partly thanks to price increases that customers seem willing to stomach. The company now boasts 196 million Disney+ and Hulu subscriptions combined.

Disney+ alone reached 132 million subscribers, up 3.8 million from the previous quarter, while international Disney+ subscribers grew four per cent.

Disney’s theme parks segment posted record results, with operating income of US$1.9 billion for the quarter, up US$219 million year-over-year. Full-year operating income for the parks division reached a record US$10 billion.

International parks showed particularly strong growth, with operating income rising 25 per cent to US$375 million, while domestic parks generated US$920 million, up nine per cent. AFP