Shares of Walt Disney Co. surged early Wednesday after the entertainment giant delivered stronger-than-expected earnings and unveiled plans to build a new theme park in Abu Dhabi—marking its first major expansion into the Middle East.
The stock jumped 10% to $101.43 in early trading, a notable rebound for a company whose shares had declined more than 17% so far this year while rivals Netflix and Comcast are up 28% and down 8.1%, respectively.
For the quarter ended March 31, Disney reported adjusted earnings of $1.45 per share, exceeding Wall Street’s expectations of $1.19, according to data from FactSet.
Revenue rose 7% year-on-year to $23.6 billion, also ahead of the consensus estimate of $23.1 billion.
Disney’s earnings were bolstered by solid results across its key business units, particularly its experiences segment, which includes theme parks, cruises, and resorts, and its streaming platforms.
“Our outstanding performance this quarter-with adjusted EPS up 20% from the prior year, driven by our entertainment and experiences businesses-underscores our continued success building for growth and executing across our strategic priorities,” said Disney Chief Executive Robert Iger.
“Overall, we remain optimistic about the direction of the company and our outlook for the remainder of the fiscal year.”
This offered reassurance to investors who had grown concerned about the potential impact of President Donald Trump’s proposed tariffs on consumer sentiment and discretionary spending.
Experiences and streaming drive growth
Revenue from Disney’s experiences segment rose 6% to $8.9 billion, beating analyst expectations of $8.7 billion.
The company reported increased attendance and higher spending at its US parks, though international operations saw a dip in operating income.
The expansion into Abu Dhabi is part of a broader strategy to invest approximately $60 billion over the next decade into the experiences segment, which now accounts for the majority of Disney’s operating income.
In addition to new parks, the company is also ramping up investments in cruise lines and ride development at its existing locations.
Streaming, another pillar of Disney’s business, also posted a strong performance.
Disney+, Hulu, and ESPN+ together added 2.5 million subscribers during the quarter.
Operating profit for the streaming division rose to $336 million, a significant jump from $47 million a year ago.
The improved profitability comes after years of heavy investment in content and technology to build out the platforms.
Disney theme park in Abu Dhabi: a “capital light” way to enter the market
Shortly after posting results, Disney revealed plans to build a new theme park in Abu Dhabi, a move that expands its global footprint to a seventh location.
The park will be located on Yas Island, already home to attractions like Ferrari World and Warner Bros. World, and will be developed in partnership with Miral, a state-backed company known for its work on large-scale entertainment projects in the region.
The company did not disclose a launch date or the scope of the park, but called the venture its most advanced and interactive yet.
The resort will be designed by Disney Imagineers and operated under Disney’s supervision, while Miral will handle financing and construction.
In return, Disney will receive a share of the park’s revenue, though specific financial terms were not made public.
“This groundbreaking resort destination represents a new frontier in theme park development,” said Josh D’Amaro, chairman of Disney’s experiences division.
“It is a testament to the strength of our brand and our confidence in the long-term demand for immersive entertainment.”
CEO Bob Iger described the Abu Dhabi project as a capital-light way to enter a new market, which allows Disney to preserve resources for other investments.
He noted that the Middle East has long shown a strong affinity for Disney’s characters and content, but that the company had so far “just scratched the surface” in the region.
Cautious optimism despite upbeat forecast
Despite the earnings beat, Disney maintained a cautious tone about the rest of the fiscal year.
It raised its full-year earnings guidance to $5.75 per share, above the analyst forecast of $5.43.
However, the company warned that it continues to monitor “macroeconomic developments for potential impacts to our businesses,” citing ongoing uncertainty about the broader operating environment.
The stock’s rise on Wednesday was a welcome sign for shareholders, many of whom have been frustrated with the company’s underperformance.
While Netflix has rallied 28% this year, Disney has struggled amid concerns over consumer spending, international park recovery, and the high costs associated with its streaming operations.
Still, the latest results and the announcement of a new park suggest that Disney is positioning itself for long-term growth.
The company’s ability to leverage its intellectual property across platforms—from theme parks to streaming to merchandise—remains a competitive advantage as it navigates an uncertain economic climate.
The post Disney (DIS) stock soars as its theme parks, streaming divisions boost earnings appeared first on Invezz
