Disney reports profit hit on higher costs, while parks business shines as CEO search narrows

Disney (DIS) reported results for its fiscal first quarter on Monday that beat forecasts and were boosted by a record quarter in its parks business, while profits fell from a year ago amid higher costs across its business units.

The company reported adjusted earnings per share of $1.63 for the quarter, topping forecasts of $1.56, with revenue growing 5% to $26 billion, ahead of expectations for $25.7 billion, according to Bloomberg data. Total operating income for the company tallied $4.6 billion in the quarter, down from $5.1 billion a year ago.

Disney’s experiences unit — which includes its parks and cruise businesses — posted record quarterly revenue of $10 billion, with attendance at its parks in the US up 1% and spending per customer rising 4% during the quarter. The company warned that international visitors to its US parks would likely be a headwind in the current quarter.

Disney stock was down more than 6% around Monday’s market open as investors digested the results and outlook.

For 2026, operating income is expected to grow by double digits year over year for its entertainment business, low single digits for sports, and high single digits for its experiences businesses.

The results came just hours after a Bloomberg report said Disney is close to naming Josh D’Amaro, who leads the company’s parks and experiences business, as its next CEO.

Asked on a call with analysts what areas of Disney his successor could “jump-start,” CEO Bob Iger noted experiences has potential to grow after a “lot of fixing” since he rejoined as CEO in November 2022.

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The company’s sports unit reported a 23% drop in operating income from a year ago due to higher costs for sports rights, including for the NBA and college sports, as well as a $110 million hit from its carriage dispute with YouTube TV. Revenue for Disney’s sports unit rose 1% year over year to $4.91 billion.

Revenues in Disney’s entertainment unit, which includes its film studio, rose 7% to $11.6 billion following strong box office performances for “Zootopia 2” and “Avatar: Fire and Ash.” But higher costs weighed on profits for the unit, which fell 35% to $1.1 billion.

Disney also reported that revenue from its streaming business, which is included in its entertainment unit, rose 11% to $5.3 billion.