Disney Q3 Pre-tax Income Climbs, Backs FY26, FY27 Outlook; Lifts Buyback Plan; Shares Up

(RTTNews) - Walt Disney Co. reported Wednesday lower net profit in its second quarter hurt mainly by the absence of prior year's tax benefit, while pre-tax income climbed from last year on higher revenues. Further, the media and entertainment major maintained its outlook for fiscal 2026 and 2027, expecting higher earnings.

The company now targets at least $9 billion in share repurchases in fiscal 2026, compared to previous view of at least $8 billion.

In the early morning trading on the NYSE, the shares were gaining around 2.5 percent to trade at $100.59.

Looking ahead for the fourth quarter, the company projects total segment operating income of around $4.9 billion, including the impact of the 53rd week.

For fiscal 2026, the company now projects adjusted earnings per share growth of around 16 percent including the 53rd week, and a growth of around 12 percent excluding the 53rd week.

Further ahead, for fiscal 2027, Disney said it continues to expect double-digit growth in adjusted earnings per share, excluding the impact of the 53rd week. In the fourth quarter of fiscal 2027, the company will lap the impact of the 53rd week in fourth quarter of fiscal 2026.

In the third quarter, net earnings attributable to the company plunged o $2.638 billion from $5.262 billion last year. Earnings per share decreased 48 percent to $1.51 from $2.92 a year ago.

Adjusted earnings were $3.827 billion or $2.06 per share for the period, compared to $3.11 billion or $1.61 per share last year.

The latest reported results were hit by income tax expense of $801 million, compared to last year's tax benefit of $2.73 billion recognized upon the change in Hulu's U.S. income tax classification.

On a pre-tax basis, income for the quarter climbed 14 percent from last year to $3.65 billion. Total segment operating income increased 21 percent year-over-year to $5.56 billion, with 64 percent jump in Entertainment and 20 percent rise in Experiences segments, partly offset by a 17 percent drop in Sports segment.

The company's revenue for the period rose 6.8 percent to $25.248 billion from $23.650 billion last year.

Entertainment revenue grew 6 percent year-over-year to $11.35 billion, Sports revenue increased 4 percent to $4.50 billion, and Experiences revenue climbed 10 percent to $9.97 billion.

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