Walt Disney Co. achieved better-than-expected profits during its fiscal second quarter because of high theme park attendance and it revealed plans to build a Disneyland resort on Yas Island in Abu Dhabi but maintained a warning about economic instability. The Abu Dhabi project represents an authentic Disney experience combined with distinct Emirati elements according to CEO Robert Iger who seeks to draw visitors from the Middle East, Africa, Asia and Europe. The resort development with partner Miral does not require Disney capital investment yet will produce royalty payments. The stock price of Disney increased by 10% to reach its highest point in two months when the market opened on Wednesday while the company faced a 17.2% year-to-date decline compared to the S&P 500’s 4.7% decline due to tariff-related economic slowdowns.
The experiences segment of Disney which includes theme parks and cruises achieved record revenue of $8.9 billion during the period which exceeded the $7.98 billion forecast made by analysts while increasing from $8.4 billion last year. The company achieved $3.3 billion in net income which exceeded both last year’s $216 million and analysts’ $1.9 billion forecast. The company achieved a 20% increase in adjusted earnings per share which reached $1.45 above the predicted $1.19. Total revenue increased to $23.6 billion from $22.1 billion while exceeding the predicted $23.1 billion. The streaming services Disney+, Hulu and ESPN+ added 2.5 million subscribers during the period while their operating income grew from $47 million to $336 million because of strategic content selection. Iger stated that the company maintains positive outlook because of its strong booking numbers which increased 4% in Q3 and 7% in Q4 yet they continue to track macroeconomic risks especially tariffs that could affect their operations.
