Disney's Dividend Increase and Share Buyback Strategy

Disney Sends Strong Message to Investors

Walt Disney caught the attention of investors by reporting stronger-than-expected profits in its fourth quarter ending in September. The company announced plans to increase its dividend by 50% by the 2026 fiscal year and revealed it would double its stock buyback program to $7 billion.

Profits Surpassed Expectations, Revenue Target Fell Short

Disney reported an adjusted earnings per share of $1.11 for the quarter. Although this represents a 3% decline compared to the previous year, it surpassed the average analyst estimate of $1.05. However, total revenue was recorded at $22.5 billion, falling short of the expected $22.75 billion. This caused Disney shares to decline by approximately 3% in pre-market trading.

Theme Parks and Cruise Business on the Rise

Disney's theme parks division performed strongly, particularly due to the expansion of cruise operations in the U.S. and growth at Disneyland Paris. This segment's operating income grew 13% year-on-year, reaching $1.88 billion. The company stated that a significant portion of the growth came from increased passenger days on cruise ships.

Digital Streaming and Traditional TV Performance

On the digital streaming side, Disney+ and Hulu gained 12.5 million new subscribers during the quarter, bringing the total subscriber count to 196 million. This segment's profits reached $352 million, reflecting a 39% increase. In contrast, traditional television continued to decline, with this segment's operating profit decreasing 21% to $391 million.

Long-Term Growth Expectations

Disney also reiterated its expectation for double-digit adjusted earnings per share growth for the 2026 and 2027 fiscal years, maintaining its confidence in strong growth objectives. Investors need to pay attention to the company's innovative strategies and regular dividend increases.