The Walt Disney Company delivered a solid fiscal first quarter as improving streaming profitability and record results from its parks and experiences business helped offset weakness in traditional television. The results arrive just as the company’s board prepares to make a long awaited decision on who will succeed current CEO Bob Iger.

Disney reported that operating income from its combined Disney+ and Hulu streaming operations jumped 72 percent year over year in the December quarter to $450 million. That figure came in well above both Wall Street expectations and the company’s own guidance, reinforcing the view that Disney’s streaming turnaround is gaining traction after years of heavy losses.

Chief Financial Officer Hugh Johnston said the gains were driven by strong engagement with established franchises and improved customer retention, particularly among subscribers who bundle Disney+ and Hulu with the company’s direct to consumer ESPN offering.

“Whomever the new CEO is, they’re getting a business that has a lot of momentum,” Johnston said on CNBC Monday.

Streaming Gains Matter as Traditional TV Weakens

Disney’s improved streaming performance is especially important as its legacy television networks continue to feel pressure from cord cutting. The company said operating income from its non streaming entertainment businesses fell sharply during the quarter, dropping 55 percent to $650 million.

Sports operating income also declined 23 percent to $191 million. Disney attributed part of that drop to a $110 million impact from a 15 day blackout on YouTube TV that occurred during a contract dispute earlier in the quarter.

Despite those headwinds, the company’s ability to generate consistent profits from streaming marks a significant shift from just two years ago, when Disney+ was viewed as a major drag on earnings. Investors have increasingly rewarded media companies that demonstrate discipline around content spending and pricing power, and Disney’s latest results suggest that strategy is starting to pay off.

Parks and Experiences Deliver Record Quarter

Disney’s experiences division once again proved to be the company’s financial backbone. Revenue from parks, cruises, and consumer products rose 6 percent to a quarterly record of $10 billion, while operating income climbed to a new high of $3.3 billion.

The company cited modest attendance growth at domestic parks, higher guest spending per visit, and strong demand for its cruise business, which recently added a new ship to its fleet. Per capita guest spending increased 4 percent, a key metric investors closely watch for pricing power and margin sustainability.

However, Disney also warned that growth in the experiences segment could slow in the current quarter due to what it described as international visitation headwinds at its U.S. parks.

Johnston did not go into detail about the causes but acknowledged that foreign tourism has softened at Disneyland in California and Walt Disney World in Florida. The slowdown comes as global travel patterns remain uneven and as U.S. policy shifts related to tariffs, visa scrutiny, and diplomatic tensions create uncertainty for international visitors.

In response, Disney said it is increasing marketing efforts aimed at domestic travelers to help offset weaker demand from overseas guests.

Financial Results Beat Expectations Despite Profit Dip

For the fiscal first quarter ended December 27, Disney reported total revenue of $25.98 billion, up 7 percent from a year earlier. Net income came in at $2.4 billion, down 6 percent year over year. Adjusted earnings per share still exceeded analyst expectations, helping to support the stock despite broader market volatility.

Disney shares slipped modestly in premarket trading following the report, reflecting a mix of profit taking and lingering investor focus on leadership uncertainty rather than dissatisfaction with the underlying results.

CEO Succession Looms Large for Investors

The company’s board of directors is meeting this week at Disney’s headquarters in Burbank, California, where it is expected to finalize its choice for the next chief executive.

Succession planning has been a persistent overhang for Disney’s stock. The company’s last leadership transition in 2020, when Bob Chapek took over from Iger, ended poorly and ultimately resulted in Iger returning less than three years later. Since then, Disney’s shares have largely moved sideways as investors waited for clarity on long term leadership.

According to people familiar with the process, the race has narrowed to two internal candidates. One is experiences Chairman Josh D’Amaro, who oversees the company’s most profitable division. The other is entertainment Co Chairman Dana Walden, a key figure behind Disney’s film and television strategy.

Speculation over the decision and whether the runner up might receive an expanded role has intensified in recent months, both inside Disney and across Hollywood.

Industry Rivals Push Ahead With Big Moves

While Disney prepares to name its next leader, competitors are pursuing aggressive strategies to adapt to a rapidly changing media landscape.

Warner Bros. Discovery recently announced a sweeping $72 billion deal involving Netflix, which plans to acquire Warner’s studios and HBO Max streaming platform. At the same time, Paramount Global has signaled interest in acquiring Warner outright, underscoring the consolidation pressures facing the industry.

Johnston declined to comment directly on Warner’s future but noted that Netflix “would be an awfully big company” if the transaction moves forward.

What It Means for Investors

For investors, Disney’s latest earnings reinforce a familiar theme. The company’s long term value increasingly rests on three pillars: sustained streaming profitability, disciplined management of declining television assets, and continued growth in parks and experiences.

The upcoming CEO decision will shape how aggressively Disney leans into each of those areas. With streaming finally contributing to profits and parks delivering record results, the next leader inherits momentum but also faces high expectations in an industry undergoing rapid transformation.

The board’s choice this week may prove just as important for Disney’s stock as the earnings report itself.