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 ending in late September. The company revealed plans to increase its dividend by 50 percent by fiscal year 2026 and stated it would double its share buyback program to $7 billion.

Profit Expectations Surpassed, Revenue Goals Fell Short

Disney reported an adjusted earnings per share of $1.11 for the quarter. Although this figure represents a 3 percent decrease compared to the previous year, it was above analysts' average estimate of $1.05. However, total revenue was recorded at $22.5 billion, falling short of expectations of $22.75 billion. This led to investors causing Disney shares to lose approximately 3 percent in pre-market trading.

Growth in Theme Parks and Cruise Business

Disney's theme park division performed strongly, particularly due to the expansion of cruise operations in the U.S. and growth at Disneyland Paris. The segment's operating income increased by 13 percent year-on-year, reaching $1.88 billion. The company noted that a significant portion of the growth was driven by increased passenger days on cruise ships.

Digital Streaming and Traditional TV Performance

In the digital streaming sector, Disney+ and Hulu gained 12.5 million new subscribers during the quarter, bringing the total subscriber count to 196 million. The profitability of this broadcasting unit rose by 39 percent to $352 million. In contrast, the traditional television segment continued to decline, with operating profit falling by 21 percent to $391 million.

Long-Term Growth Expectations

Disney also reaffirmed its expectation 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 regular dividend increases.