Disney's Dividend Increase and Share Buyback Strategy

Disney Sends Strong Message to Investors

Walt Disney caught the attention of investors by announcing a stronger-than-expected profit in the fourth quarter of its fiscal year that ended in late September. The company announced plans to increase its dividend payout by 50% by fiscal year 2026 and stated it would double its share repurchase program to $7 billion.

Profits Exceeded Expectations, Revenue Fell Short

Disney announced that its adjusted earnings per share for the quarter were $1.11. Although this figure represented a 3% decline from the previous year, it was above the analysts' average estimate of $1.05. However, total revenue was recorded at $22.5 billion, falling short of the $22.75 billion expectation. This caused Disney's shares to decline by approximately 3% in pre-market trading.

Strong Performance in Theme Parks and Cruise Business

Disney's theme parks division performed strongly, particularly due to the expansion of its cruise operations in the U.S. and growth at Disneyland Paris. The operating income for this segment increased by 13% year-over-year, reaching $1.88 billion. The company noted 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, raising the total subscriber count to 196 million. This broadcasting unit's profit rose by 39% to $352 million. Conversely, the traditional television segment continued to decline; its operating profit fell 21% to $391 million.

Long-term Growth Expectations

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