Disney Earnings: Comeback kid?

November 13, 2025

“The Mouse” reported earnings this morning, and the results were okay.  Actual results were essentially in line with estimates.  But guidance was the problem.  For next year, management expects “double-digit” earnings growth.  That is roughly in line with expectations.  But the problem is that the growth is weighted towards the back half of the upcoming year.  (The street never likes that.)  So the stock is suffering today as a result.  Down -9% at the moment.

Disney is a company in transition.  As more people “cut the cord”, the profits from their core cable networks (ESPN, ABC, etc) continue to shrink.  There was a time not too long ago that the profits from ESPN alone accounted for 40% of Disney’s total profit.  And now, it’s around 16% (and still falling).

That drop, however, is offset by growth in streaming (Disney+, ESPN+, Hulu, etc) and the “experiences” division (Disney parks, Disney cruises, and retail stores).   In fact, the experiences division generated more than half of the total profit for the whole company in the past year.  The streaming business is growing fast, but it also has the lowest profit margins.   So ESPN+ is great and all, but it’s much less profitable than the original ESPN channel on Time Warner Cable was.

Needless to say, Disney stands alone with regard to the uniqueness of their brands and properties.  But the key question is:  how much money can they make from them?  And how fast are they growing?  “Double-digit” earnings growth for next year appears not to be good enough today.

Below is a chart showing Disney’s operating profit ($mm) per year.  They obviously had a big drop during the Covid pandemic.  They are only now getting back to the pre-Covid levels.