Disney lifts profit outlook as parks, streaming drive Q3 earnings beat — but linear declines weigh on shares Alexandra CanalAugust 6, 2025 at 6:08 AM Disney (DIS) reported fiscal third quarter earnings on Wednesday that beat expectations, driven by continued strength in its domestic parks business a...
- - Disney lifts profit outlook as parks, streaming drive Q3 earnings beat — but linear declines weigh on shares
Alexandra CanalAugust 6, 2025 at 6:08 AM
Disney (DIS) reported fiscal third quarter earnings on Wednesday that beat expectations, driven by continued strength in its domestic parks business and a year-over-year swing to profitability in its streaming unit.
However, steep declines in the company's linear television business overshadowed some of that momentum, with shares slipping about 2% in pre-market trading.
Disney raised its full-year profit forecast to $5.85 a share, up from its May forecast of $5.75 and ahead of Wall Street expectations of $5.77.
Prior to its earnings update, Disney also confirmed previous reports that ESPN has reached a preliminary deal to acquire key NFL Media assets, including NFL network, NFL RedZone, and NFL Fantasy, in exchange for a 10% equity stake in the network.
Alongside the sale of NFL Network, the league and ESPN have also agreed to a second deal under which the league will license certain NFL content and intellectual property to ESPN for use across NFL Network and related assets. The news comes as ESPN prepares to launch a new standalone service on August 21, the company confirmed early Wednesday.
Also on Wednesday, ESPN unveiled a separate agreement with the NFL to extend its NFL Draft rights and expand league content across its upcoming streaming service. The deal also enables bundling NFL+ Premium, which includes RedZone and NFL Network, with the soon-to-launch platform.
Disney's ESPN is launching new standalone streaming service this fall. (AP Photo/Kamil Krzaczynski, File) ()
Analysts see the debut as a key step toward more bundling opportunities with Disney+ and Hulu, as streamers across the industry work to retain subscribers and reduce churn.
The deal had been previously reported by the Athletic. Ahead of its confirmation, Morgan Stanley analyst Ben Swinburne wrote in a Monday note, "With the NFL as an investor, ESPN's long-term future is incrementally more secure."
He added, "While the NFL cannot stop cord-cutting and will surely not give Disney a discount in future rights renewals, by investing in ESPN, the NFL will be even more motivated to help ESPN survive and potentially thrive in the new streaming-first world ahead."
Legacy headwinds meet digital gains
Disney reported revenue of $23.65 billion for the quarter, roughly in line with analyst expectations of $23.68 billion and up 2% from the same period last year.
Adjusted earnings per share of $1.61 came in ahead of the $1.46 expected by analysts polled by Bloomberg. Earnings increased from $1.39 from a year ago.
However, ongoing weakness in Disney's linear networks business weighed on the quarter. Revenue in the segment fell 15% year over year while operating income dropped 28%. The decline in traditional TV, which includes ABC and Disney's cable networks, overshadowed strength in other areas and contributed to the stock's post-earnings slide.
On the streaming front, Disney+ added 1.8 million subscribers in the quarter, falling short of the 2.05 million analysts polled by Bloomberg had expected.
Disney continues to prioritize consistent profitability in streaming amid the ongoing shift away from traditional pay-TV. Disney is targeting approximately $875 million in streaming profits for fiscal 2025. (Courtesy: REUTERS/Dado Ruvic/Illustration) (REUTERS / Reuters)
Disney's direct-to-consumer segment, which includes Hulu and Disney+, posted a profit of $346 million, compared to a $19 million loss a year ago. The company continues to prioritize consistent profitability in streaming amid the ongoing shift away from traditional pay-TV. Disney is targeting approximately $875 million in streaming profits for fiscal 2025.
Looking ahead, Disney expects total Disney+ and Hulu subscriptions to grow by more than 10 million in the current quarter, with most of that growth coming from Hulu due to an expanded distribution deal with Charter (CHTR). Disney+ is expected to see a more modest sequential increase.
Meanwhile, the parks business continued to shine in the quarter.
Revenue of $9.09 billion beat expectations of $8.87 billion with the company posting a 22% rise in operating income at its domestic parks. The gains were fueled by increased guest spending at theme parks, higher hotel occupancy, and a rise in cruise passenger volumes following the successful launch of the Disney Treasure late last year.
In a notable push abroad, the company recently announced plans to open a new theme park and resort in Abu Dhabi — its first major expansion into the Middle East and its seventh global resort. The move comes as fresh competition emerges closer to home following the debut of NBCUniversal's Epic Universe in May.
Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].
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