NEW YORK — The Walt Disney Co. on Thursday morning released its fiscal fourth quarter 2025 results, and both CEO Bob Iger and CFO Hugh Johnston saluted “another year of great progress” as the owner of ABC and ESPN, among other television industry assets, “continued to make meaningful progress in our direct-to-consumer businesses.”
While Disney+ and Hulu + Live TV are clear growth engines, what’s the fiscal health of ABC Owned Stations and its linear channels?
Iger and Johnston didn’t focus on that in their combined comments, instead focusing their discussion on the “strong viewership” of content such as the television series Alien: Earth on FX and the latest season of ABC’s Dancing with the Stars.
As for Disney’s Entertainment streaming business, it “had another quarter of profit growth,” Iger and Johnston said.
That’s perhaps a clear statement that ABC, ESPN and the linear channels could be ripe for a spin, as Iger and Johnston were eager to share how Disney continues to establish Direct-to-Consumer as “a core driver of growth.” Furthermore, the company is advancing important initiatives to create a unified app experience to better serve our users and “provide opportunities to unlock new value for the company.”
Then, there is the Experiences segment, which delivered “record” operating income for both fiscal Q4 and the full fiscal year of 2025, they said.
So why did Disney shares tumble by 9.7% in mid-morning trading on the NYSE? Look no further than the Free Cash Flow, which fell by 37% year-over-year to $2.56 billion. And, there’s the TV segment, which has investors clearly concerned.
These worries put Disney shares at $105.43, down nearly $11 per share from Wednesday, as of 11:27am Eastern.
For the quarter ended September 27, 2025, revenue was flat, coming in at $22.46 billion compared to $22.57 billion one year ago. Total segment operating income declined to $3.48 billion from $3.66 billion, as the diluted earnings per share rose to $0.73 from $0.25. The results surpassed Wall Street estimates.
Looking closer, by segment, the Entertainment unit — Disney’s biggest profit generator — is its weakest, with revenue falling in fiscal Q4 to $10.21 billion from $10.83 billion as segment operating income slid to $691 million from $1.07 billion.
Furthermore, the Linear Networks’ ad revenue challenges are notable when compared to the direct-to-consumer performance.
In particular, domestic operating income fell by 5% to $329 million for three reasons. First, there was advertising revenue declines due to lower rates, a lack of robust political advertising and comparisons to the Emmy Awards show, which aired in fiscal Q4 2024 but not the most recent quarter.
There was also lower affiliate revenue “attributable to fewer subscribers,” reflective perhaps of MVPD “cord-cutting” and carriage fee disputes.
For the D2C segment, Disney+ subscriber rolls improved by 3%, to 59.3 million. Hulu’s total line subscriber growth was 15%, rising to 64.1 million on the strength of “SVOD Only” rolls.
While the linear networks performance was subpar, it is important to note that ESPN falls under the Sports unit at Disney. In fiscal Q4, ESPN’s domestic revenue improved to $3.58 billion, from $3.49 billion. However, domestic operating income fell by 3% to $908 million, from $936 million.
Disney does not break out its financial performance for the ABC Television Network or ABC Owned Stations, and includes it in the performance of all of its linear networks and channels.
GUIDANCE GLANCE
- The Walt Disney Co. anticipates direct-to-consumer SVOD operating income of about $375 million in fiscal Q1 2026
