Disney reported record parks revenue and streaming growth. Why did the stock fall?

Disney's financial results for the first quarter exceeded analysts' expectations due to record quarterly revenue from the Experiences division, which combines theme parks and cruises, as well as a sharp increase in operating profit of Disney+ and Hulu streaming services. However, the company's shares fell sharply after the opening of trading: investors are worried about the cautious outlook and uncertainty surrounding the CEO change.

- Disney reported net income of $2.48 billion, or $1.6 per share, beating analysts' average forecast of $1.56, Bloomberg writes. Profit decreased by about 6% compared to the same period of the previous year.

- By contrast, operating profit for the parks division rose 6 percent from a year ago to $3.3 billion - driven by increased attendance, higher guest spending and the introduction of a new cruise ship, the company said.

- Operating profit of streaming services Disney+ and Hulu added 72% compared to the same quarter last year and reached $450 million, significantly exceeding the expectations of Wall Street analysts and Disney's own forecast, reports the Wall Street Journal. Total revenue for the division, which includes streaming services and movie distribution, totaled $11.6 billion for the period, up 7% year over year. The company noted the success of "Zveropolis 2" as well as new installments of the "Avatar" and "Predator" franchises.

- However, the profit of the entertainment division as a whole decreased by more than a third - to $1.1 billion. The pressure on the results was caused by a decrease in political advertising on TV channels and streaming services Disney, as well as marketing costs associated with the release of James Cameron's film "Avatar: Fire and Ashes". The company warned about such one-time costs back in November, Bloomberg writes.

- Disney's total revenue rose 5 percent to $25.98 billion, while Wall Street expected $25.99 billion, The Associated Press noted.

- For the current quarter, Disney expects operating profit in its entertainment division to be flat compared to the same period last year. The company attributes this to weakening international tourist traffic in the U.S. parks, as well as the costs of preparing for the launch of the new Disney Cruise Line liner and expenses before the opening of the World of Frozen area in Disneyland Paris, CNBC writes. At the same time, the company expects a profit in the streaming TV business of $500 million - $200 million more than a year earlier.

- For the fiscal year as a whole, the company is forecasting double-digit growth in earnings per share. Disney also said it is on schedule to repurchase $7 billion worth of its own stock this year.

The question of who will succeed Bob Iger as CEO is becoming increasingly important to Disney investors, CNBC notes. This is the second time Disney has chosen a replacement for Iger: Bob Chapek took over the company in 2020, but he was fired in 2022 and Iger returned to the top job. By that point, Disney's stock had sagged noticeably, and the company and Iger were tasked with strengthening its position in movie distribution and restoring growth in the parks business, the network reports.

"Accelerating park development, taking streaming to profitability and double-digit margins, and improving theater business performance create a favorable environment for the new CEO," said CFO Hugh Johnston.

According to CNBC's sources, Disney's board of directors will meet this week and is expected to vote on Eiger's successor. The company previously said it would announce a new CEO in the first quarter of this year. The top contenders include two of Eiger's deputies - Disney Experiences chairman Josh D'Amaro and Disney Entertainment co-chairman Dana Wallace. At the same time, D'Amaro is now in charge of a key area for the company, which provides the bulk of profits, writes CNBC.

The company's shares were down 8% to $103.75 at the moment in trading on February 2. This is the minimum since November 28, 2025. Over the past 12 months, the company's securities have fallen 7%. Uncertainty over how Disney will decide on a successor CEO has been weighing on the company for three years - over that period, the stock has been virtually stuck in place, WSJ notes.

Of the 33 analysts covering Disney securities, 25 advise buying them, seven recommend holding them in a portfolio, and only one recommends selling them. The average target price of analysts suggests a rise of almost 18% relative to the closing price on January 30.

This article was AI-translated and verified by a human editor