Disney stock spiked after clearing Q2 estimates Wednesday morning. Disney+ subscribers also topped views, and the Dow Jones entertainment giant announced plans for a new theme park in Abu Dhabi. Warner Bros. Discovery's reports Q1 results on Thursday morning.
The earnings come on the heels of President Donald Trump's plans to add movies to his growing list of import tariffs.
Disney Earnings
Disney reported a 20% increase in earnings to $1.45 per share adjusted on 7% revenue growth to $23.6 billion.
FactSet expected earnings of $1.19 per share on $23.09 billion in sales.
Entertainment revenue increased 9% to $10.68 billion, outpacing the 7.5% growth expected by analysts.
Linear networks revenue declined 13% to $2.4 billion. Direct-to-consumer revenue increased 8% to $6.11 billion.
The number of Disney+ subscribers increased to 126 million to beat FactSet views for 123.5 million. Disney+ had 124.6 million subscribers in Q4 and 153.6 million last year, respectively.
Hulu subscribers came in at 54.7 million for the quarter, ahead of views for 54.1 million.
The number of ESPN subscribers declined 3% to 24.1 million, below estimates for 24.8 million.
Still, sports revenue rose 5% to $4.5 billion, partly due to higher ESPN+ prices.
Experiences revenue increased 6% to $8.88 billion, while FactSet expected $8.78 billion. Disney noted that traffic rose at domestic parks, as well as the Disney Vacation Club and Disney Cruise Line. The growth was due to a greater number of passenger cruise days, higher theme park attendance and occupied room nights. Guest spending also rose at theme parks.
Disney's consumer products saw revenue and operating income growth due to higher licensing revenue, including the recent release of the licensed video game Marvel Rivals.
Looking Ahead
"We have a lot more to look forward to, including our upcoming theatrical slate, the launch of ESPN's new DTC offering, and an unprecedented number of expansion projects underway in our experiences segment," CEO Bob Iger said in the release. "Overall, we remain optimistic about the direction of the company and our outlook for the remainder of the fiscal year."
For Q3, Disney expects a modest increase in Disney+ subscribers compared to Q2.
For the year, the company earnings to increase 16% to $5.75 per share adjusted. The guidance is well above FactSet views for $5.43 per share adjusted.
Disney sees double-digit operating income growth for the entertainment segment. Experiences operating income is expected to grow between 6% and 8%. Disney expects sports operating income to jump 18%.
However, Disney noted it is still monitoring macroeconomic developments for potential business impacts and noted uncertainty remains for the rest of the year.
New Theme Park
In a separate release Wednesday, Disney announced it is opening a new theme park on Yas Island in Abu Dhabi. The new resort will be developed and built by Miral, while Disney and the Imagineers lead creative design and operational oversight. It will mark Disney's seventh theme park destination and the first location in the United Arab Emirates.
Iger in the release said the park will blend "contemporary architecture with cutting edge technology to offer guests deeply immersive entertainment experiences in unique and modern ways." He added that "Disneyland Abu Dhabi will be authentically Disney and distinctly Emirati."
Josh D'Amaro, Chairman for Disney Experiences said the Abu Dhabi resort will be "the most advanced and interactive destination in our portfolio."
The release noted that the UAE is within a four-hour flight for one-third of the world's population and home to the world's largest global airline hub, making it a significant gateway for tourism.
The company did not reveal an expected timeline for the resort opening.
Disney Stock
Disney stock spiked 10.8% Wednesday to rebound above its 50-day and 200-day lines. DIS stock ticked up a fraction on Tuesday.
Disney stock is off its April lows but still down more than 8% so far this year. Disney is the sixth-worst performer in the Dow in 2025, trailed only by Salesforce, Merck, Apple, UnitedHealth Group and Nike.
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Warner Bros.
FactSet expects Warner Bros. to post a loss of 19 cents per share, improving from a loss of 40 cents last year.
Analysts forecast a 3.7% decline in sales to $9.59 billion.
FactSet expects Warner Bros. subscriptions, including Max, total 119.46 million subscribers at quarter end, compared to 116.9 million in Q4 and 99.6 million last year, respectively.
Analysts expect studio revenue ticks up a fraction to $2.825 billion. Wall Street sees networks revenue falling 9.2% to $4.66 billion.
FactSet predicts direct-to-consumer revenue increases 11.6% to $2.75 billion.
WBD Stock
WBD stock climbed 1.5% Wednesday. Warner Bros. shares rose less than 1% Tuesday. WBD stock is down 19% in 2025.
New Movie Tariffs
Comments on and discussion of the possible impact from foreign film tariffs will be of central interest.
President Trump on Sunday posted on Truth Social media that U.S. movie production is "dying" because foreign nations have lured away filmmakers and studios with "all sorts of incentives." In response, Trump authorized the Department of Commerce and U.S. Trade Representative to "immediately begin the process of instituting a 100% tariff on any and all movies coming into our country that are produced in foreign lands," Trump said.
The announcement caught Wall Street by surprise. Analysts responded with a mix of doubt, confusion and concern.
"We see this as a very low-probability outcome as the potential downside for the U.S. from adding digital goods and services into the trade war mix far outweighs the upside," TD Cowen analyst Doug Creutz said in a client note Monday. "The proposal lacks policy detail and is not something we expect to gain serious traction."
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Barclays analyst Kannan Venkateshwar in a Monday note commented that there are "literally no details available at this point" outside of the social media post, so it is unclear how this will be implemented, according to reports. However, if the tariffs are deployed on a wide scale, they "may end up harming the very industry it is supposed to help."
The firm noted that the U.S. exports triple the amount of content that it imports and generates a $15 billion trade surplus.
Morgan Stanley reportedly predicts that in the bear case, tariffs on movies could reduce the earnings power of all companies in the value chain. Implementing 100% tariffs on some or all of the cost of a film would also lead to fewer and more expensive movies, Morgan Stanley said. Meanwhile, most of the modern filmmaking process is split across various countries. Writing, production, editing and postproduction may take place in different nations, the report said. There is also a risk of retaliatory tariffs. Foreign governments could respond by taxing or blocking U.S. streaming services or film releases.
President Trump in the Oval Office on Monday said the administration is going to meet with the industry regarding the new tariffs, the Wall Street Journal reported. "I want to make sure they're happy with it, because I'm all about jobs."
Disney's new Marvel film, "Thunderbolts" was primarily filmed in Georgia. But some scenes were filmed in Malaysia. The next two Avengers movies are set to film in the U.K. Meanwhile, Warner Bros.' recent "A Minecraft Movie" filmed in New Zealand and Canada.
With little information at this point, it also remains to be seen how or if animated films produced largely in the U.S., but animated elsewhere — a common practice in the industry, could be taxed.
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