Disney’s Earnings Had 2 Big Problems. The Stock Is Down.

Disney said in August that it would stop reporting quarterly subscriber numbers for its streaming services. (Mario Tama/Getty Images)

Key Points

• Walt Disney’s stock fell after missing Wall Street’s quarterly sales target.
• Revenue decreased by 0.5% to $22.46 billion, while adjusted earnings were $1.11 per share.
• Operating income for Disney’s entertainment segment dropped 35% due to lower TV advertising and box-office sales.

Walt Disney stock was tumbling on Thursday, after a slump in movie and TV revenue left the company with weaker quarterly sales than Wall Street expected.

Shares dropped 9.7% to $105.34, putting them on pace for their largest percentage decrease since Nov. 9, 2022, according to Dow Jones Market Data. The stock was the worst performer in the S&P 500 as the index fell 1.2% on Thursday.

The selloff came after Disney reported adjusted earnings of $1.11 a share and revenue slipped 0.5% from a year earlier to $22.46 billion. Analysts were expecting earnings of $1.05 a share from revenue of $22.76 billion, according to FactSet.

Created with Highcharts 9.0.1Walt Disney Co.Stock ticker: DISSource: FactSetAs of Nov. 13

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Operating income for Disney’s entertainment segment plunged 35% from a year ago to $691 million. Both TV advertising and box-office sales fell.

That was offset by an uptick in profit for streaming and theme parks, which analysts believe will be key to Disney’s future earnings growth.

The Disney+ streaming platform didn’t take much of a hit from the Jimmy Kimmel controversy, adding 3.8 million subscribers over the quarter, which will be the final time the company discloses these figures. Analysts were expecting 2.2 million additions.

Operating income for the experiences division, which includes Disney’s parks, climbed 13% from a year ago to $1.89 billion. That is a strong result, considering consumer spending has been slowing. Comcast just opened its Universal Epic Universe in Orlando, Fla., Disney’s traditional backyard.

Disney stood by its previous financial guidance, which forecasts double-digit adjusted earnings-per-share percentage growth in fiscal 2026 and 2027. But it warned that entertainment operating income would likely take a $400 million hit this quarter due to weakness at the box office.

Wells Fargo analyst Steven Cahall wrote in a note on Thursday that Disney’s financial results indicate a strong fiscal year ahead, as earnings and streaming subscribers grew more than expected. However, he expects the fiscal first-quarter financials to potentially be “weaker,” meaning investors may not see strength until the second half of the year.

Cahall rates Disney as Overweight with a $159 price target.

Investors have also been hoping for news about a continuing dispute between Disney and Alphabet’s Youtube TV. Disney channels went dark on YouTube TV last month, after the two sides failed to come to terms on a new streaming agreement. Disney said in a securities filing that it “cannot predict how long this service blackout will last or reasonably estimate the adverse impact on our results of operations.”

Morgan Stanley analyst Benjamin Swinburne wrote in a note on Sunday that he thinks “each week of lost distribution is estimated at $0.02 of lower adj. EPS [for Disney].” He also said that he estimates the blackout “is a $60mm revenue headwind.”

As of Wednesday’s close, the shares were up 4.8% for the year. The S&P 500 has risen 16% in 2025.

Write to George Glover at george.glover@dowjones.com