Disney's Latest Earnings Report Analysis

Introduction

• Disney has acknowledged that "Thunderbolts" and "Elio" were flops.
• This admission comes from Disney's fiscal third-quarter earnings report for 2025.

Key Points from the Earnings Report

• Fiscal Performance:

  • Disney reported total revenues of $23.7 billion for Q3 2025, marking a 2% increase from the previous year. Growth was primarily driven by its parks segment.
  • The content sales, licensing, and other segments reported an operational loss of $21 million, contrasting with a $254 million operating income in Q3 2024.

• Impact of Flops:

  • "Thunderbolts" and "Elio" contributed to the operational loss due to poor theatrical distribution results compared to prior successes like "Inside Out 2."
  • Lilo and Stitch, while successful, did not compensate for the losses incurred by the other films.

• Financial Implications:

  • Higher film cost impairments indicate Disney expects "Thunderbolts" and "Elio" will not recover production and marketing costs through various revenue streams.
  • "Thunderbolts" and "Elio" had high production budgets: $180 million and over $200 million respectively.

Evaluation and Future Outlook

• Disney's selective emphasis on successful films during the earnings call highlights the company's recognition of these flops as disappointments.
• Future Successes and Expectations:
  • Focused on upcoming successful franchise titles, such as "Zootopia 2" and "Avatar: Far and Ash."
  • Despite challenges, highlights operational successes in streaming and experiences with increased operating income.

Industry Insights

• Film Division Struggles:
  • Disney's film division is underperforming, despite overall operational wins.
  • The industry as a whole is facing challenges, with Disney demonstrating how multiple flops can drag down overall segment performance.

Conclusion

• Disney admits failures of "Thunderbolts" and "Elio" through strategic omission in their earnings report.
• The forthcoming report around "Fantastic 4" could be intriguing given current trends.
• Disney remains committed to old properties and anticipated successes in upcoming releases to revitalize its film division.

Miscellaneous

• Stock fluctuations and market reactions remain dynamic in response to these reports.

Note: This content reflects a summary of the earnings report and the current state of Disney’s film strategy, highlighting insights into the company's future directions.