Disney beats earnings expectations under new CEO Josh D'Amaro
Disney beat Q2 earnings expectations with $25.2B revenue and strong streaming profitability under new CEO Josh D'Amaro's first earnings report.
Objective Facts
Disney's earnings for Q2 of fiscal 2026, the first with Josh D'Amaro as CEO, beat Wall Street estimates as Disney+ and Hulu continued to surge. Walt Disney exceeded Wall Street's quarterly earnings estimates on Wednesday as streaming and theme park revenue rose, reporting adjusted earnings-per-share of $1.57 and revenue of $25.2 billion for January through March, with analysts on average having expected adjusted EPS of $1.49 and revenue of $24.78 billion. Revenue from Disney+ and Hulu accelerated in the period, up 13% to $5.49 billion, and operating income soared 88% to $582 million, hitting 10.6% operating margins and remaining on track to achieve at least 10% for the full fiscal year 2026. While global guest attendance grew 2%, domestic park visitation declined 1% compared with last year, with international visitation at domestic parks softer, though Disney said demand at domestic parks remained healthy despite macroeconomic trends including the U.S.-Israel attacks on Iran in late February which caused oil prices to surge. D'Amaro laid out three main strategic pillars in a shareholder letter: investing in IP, improving customer reach and engagement, and leaning into technology.
Left-Leaning Perspective
Mainstream financial coverage from outlets like Variety and CNBC focused neutrally on earnings performance rather than offering strong left-leaning critique. Variety's reporting on the layoffs noted that D'Amaro stated "I know this is hard" and emphasized the restructuring was about managing resources more effectively, suggesting the coverage aimed to contextualize the cuts within broader industry trends. No prominent left-leaning outlets explicitly attacked D'Amaro's earnings strategy or workforce reduction announcement in the search results, with financial journalists instead treating the layoffs as routine corporate restructuring. Where progressive commentary appeared, it focused on worker concerns. User comments on Deadline's coverage of the April layoffs expressed concern that the company was "playing a sick and cruel game with everyday workers' lives" while raising prices, questioning whether "AI takes their job" and noting the lack of legislation to prevent mass layoffs. However, these were reader comments rather than editorial positions from named left-leaning analysts or commentators. The broader left-leaning critique of Disney under Iger's tenure—regarding the company's political rhetoric and cultural direction—did not surface in coverage of today's earnings results focused on D'Amaro's financial performance.
Right-Leaning Perspective
Conservative outlets and some investors viewed D'Amaro's earnings results and cost-cutting approach positively. CNBC investor Sarat Sethi stated in March that he was "a buyer of Disney" due to streaming profitability turnaround and shareholder returns. Outkick's media commentary, representing right-leaning analysis, blamed the previous Iger era for political overreach damaging IP value, suggesting D'Amaro could improve matters by deprioritizing "unnecessary politicization" in film and television content—a common conservative criticism of post-2020 Disney creative direction. Conservative business analysts emphasized operational discipline. Wall Street observers noted that D'Amaro's background in theme parks—Disney's most profitable division—suggested he would apply similar efficiency standards across entertainment. The narrative framed layoffs as necessary cost rationalization in a contracting media industry rather than a failure of leadership, with some commenters noting the cuts followed industry-wide patterns of workforce reduction. No prominent right-leaning outlets offered detailed editorial analysis of today's specific earnings results in the search results, though prior conservative commentary had positioned D'Amaro as a potential corrective to what Outkick termed Iger's "political failures."
Deep Dive
Disney's Q2 2026 earnings announcement marks a significant inflection point under new CEO Josh D'Amaro: streaming profitability has finally reached double-digit operating margins after years of losses, validating the company's multi-billion dollar investment in Disney+ and Hulu. The 88% jump in streaming operating income to $582 million, driven by pricing increases implemented in fall 2025, demonstrates that the streamer can achieve margins comparable to traditional cable networks. This achievement carries major strategic implications—it suggests Disney's transformation from a theatrical and linear TV company to a platform spanning streaming, parks, and content is workable, even if execution has been messier than initially promised. However, the earnings call revealed fault lines that define the specific challenge D'Amaro inherits. Domestic park attendance declined 1% despite revenue growth of 7%, a divergence explained by higher per-guest spending and the absence of growth from foot traffic. International visitation to U.S. parks has been softer for multiple quarters, a trend CFO Hugh Johnston attributed to geopolitical uncertainty and oil price pressures. This means Disney is relying on pricing power from existing guests rather than volume growth—sustainable only if demand truly remains "healthy" as management claims. The company expects Q3 park attendance to improve, but this guidance hinges on stabilization of international travel patterns largely outside Disney's control. D'Amaro's first major action as CEO—announcing 1,000 layoffs in early April—frames the broader strategic tension. The layoffs centered on consolidating marketing across the company's sprawling divisions, a structural move that reflects lessons from the parks business where efficiency and unified messaging drive results. Wall Street viewed this as prudent; business analysts expected D'Amaro to transplant parks-style operational discipline into entertainment divisions. Yet worker commentary and fan communities raised concerns about whether cost-cutting, paired with price increases, signals a company extracting more value from fewer employees and guests. D'Amaro's shareholder letter framed the trade-off explicitly: reinvesting savings into IP, technology, and international expansion rather than preserving headcount. What each perspective gets right and overlooks: Right-leaning analysts correctly identify that streaming profitability is now mathematically achievable and that operational consolidation often precedes efficiency gains. They note that Disney's valuation—trading at 15x forward earnings versus a historical average of 24x—offers value if execution delivers. What they downplay is whether the company's content IP library remains creatively competitive; Outkick's criticism of recent box office failures (Avatar underperformance, cancelled projects) addresses real problems that cost-cutting alone cannot solve. Left-leaning worker advocacy correctly identifies that layoffs paired with price increases concentrate gains among shareholders while dispersing costs across workers and consumers. What it overlooks is that D'Amaro's parks background suggests he may be more competent at balancing pricing with experience quality than predecessors, and that streaming margin targets, once achieved, create reinvestment capacity. Critical unknowns: First, whether international visitation rebounds sufficiently to drive attendance growth alongside pricing. If not, Disney faces a ceiling on park revenue growth and must accelerate new attractions (World of Frozen, Tropical Americas land opening in 2027) to stimulate demand. Second, whether the company can regenerate hit IP from its studios and content divisions after several years of underperformance; streaming profitability is now locked in, but feeding those streams with breakout content remains difficult. Third, whether 1,000 layoffs are sufficient to improve operational efficiency, or if further restructuring will follow. D'Amaro has framed this as the right-sizing following a merger with Fox and streaming buildout, but quarterly results will signal whether that was accurate or if deeper contraction is ahead.