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The Walt Disney Company DIS reported second-quarter fiscal 2025 adjusted earnings of $1.45 per share, which beat the Zacks Consensus Estimate by 22.88% and increased 19.8% year over year.

Revenues rose 7% year over year to $23.62 billion and beat the consensus mark by 2.1%.

Disney shares were up more than 10% at the time of writing this article. DIS shares have dropped 8.5% year to date (YTD), outperforming streaming peers Amazon AMZN and Apple AAPL, shares of which dropped 14.8% and 20.9%, respectively. Disney shares have underperformed Netflix NFLX shares, which have returned 27.9% YTD.

In the trailing 12-month period, Disney shares have underperformed Amazon, Apple and Netflix. While Disney has declined 4.3%, Apple and Netflix shares have jumped 8.3% and 87%, respectively. Amazon shares declined 0.7%.

The Walt Disney Company Price

The Walt Disney Company price | The Walt Disney Company Quote

Disney’s Q2 Segment Details

Entertainment revenues (45.2% of revenues) increased 9% year over year to $10.68 billion.

Revenues from Linear Networks declined 12.5% year over year to $2.42 billion. Direct-to-Consumer revenues increased 8.4% year over year to $6.12 billion. Content Sales/Licensing and Other revenues grew 54.5% year over year to $2.15 billion.

Experiences revenues (37.6% of revenues) rose 5.9% year over year to $8.89 billion. Domestic revenues were $6.5 billion, up 9.1% year over year. International revenues decreased 5.3% year over year to $1.44 billion in the reported quarter. 

Meanwhile, Disney’s Sports revenues increased 5% year over year to $4.53 billion.

Disney’s Q2 Subscriber Details

As of March 29, 2025, Disney+ had 126 million paid subscribers compared with 124.6 million as of Dec. 28, 2024. 

Domestic Disney+ average monthly revenue per paid subscriber increased 5% to $7.52 due to increases in prices, partially offset by lower advertising revenues.

International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber increased from $6.78 to $7.19 due to increases in prices and subscriber mix shifts.

Hulu SVOD Only average monthly revenue per paid subscriber decreased from $12.52 to $12.36 due to lower advertising revenue, partially offset by increases in pricing.

Disney’s Q2 Operating Details

Costs & expenses increased 4.7% year over year at $20.12 billion in the reported quarter. 

Segmental operating income was $4.44 billion, up 15.4% year over year.

Entertainment segmental operating income surged 94.9% year over year to $1.7 billion. Linear Networks’ operating income increased 2.3% to $769 million. Direct-to-Consumer operating income was $336 million compared with the year-ago quarter’s operating income of $47 million. Content Sales/Licensing and Other operating income were $153 million against an operating loss of $18 million reported in the year-ago quarter. 

Experiences segmental operating income was $2.49 billion, up 9% year over year. 

The Domestic segment reported an operating income of $1.82 billion, up 13.4% year over year. The International segment reported an operating income of $225 million, down 22.9% year over year. Consumer Products’ operating profit increased 14.5% year over year to $443 million.

Sports operating income fell 12% year over year to $687 million.

Disney’s Balance Sheet Remains Strong

As of March 29, 2025, cash and cash equivalents were $5.85 billion compared with $5.48 billion as of Dec. 28, 2024.

Total borrowings (including the current portion of borrowings) were $42.9 billion as of March 29, 2025, compared with $45.3 billion as of Dec. 28, 2024.

Free cash flow was $4.89 billion in the reported quarter.

Disney Offers Positive Guidance

For fiscal 2025, Disney expects adjusted earnings of $5.75 per share, up 16% over fiscal 2024. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Entertainment operating income growth is expected to be in the double-digit percentage range, while Experiences’ operating income growth is expected to be between 6% and 8% year over year. The Sports segment's operating income is expected to grow 18%.

For the fiscal third quarter, Disney expects a modest increase in its Disney+ subscriber base on a sequential basis.

Zacks Rank

Disney currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

By Dean Seal

Amazon Web Services plans to invest $4 billion to launch an infrastructure cloud region in Chile by the end of next year.

The cloud business of Amazon.com, better known as AWS, said Wednesday that the new infrastructure region will allow organizations in Chile to run workloads and securely store data via domestically located AWS data centers.

The company intends to invest $4 billion to support the construction, operation and maintenance of data centers in Chile.

"The AWS South America (Chile) Region will help serve the fast-growing demand for cloud services across Latin America and in Chile," Prasad Kalyanaraman, vice president of Infrastructure Services, said in a statement.

Earlier this year, AWS announced a $5 billion plan to launch an infrastructure cloud region in Mexico.

Write to Dean Seal at dean.seal@wsj.com

PepsiCo has reached a strategic, multi-year agreement with Amazon.com's Amazon Web Services to help it accelerate its digital transformation, the companies said Wednesday.

Pepsi will work with AWS on a number of initiatives, including cloud migration and IT modernization, generative AI, achieving greater consumer connection and transforming global operations, the companies said.