Net Income Decline Driven by Prior-Year One-Time Tax Benefit
Net income attributable to Disney dropped 50% to $2.64 billion, primarily because the prior-year quarter included a $3.3 billion non-cash tax benefit recognized upon a change in Hulu's U.S. income tax classification. Excluding this and other items, adjusted EPS would have shown a more modest decline.
Restructuring and Impairment Charges of $900 Million
The current quarter included $900 million in restructuring and impairment charges, with $812 million from an impairment of Disney's investment in A+E and $88 million for severance. This compares to $185 million in the prior-year quarter, mainly from a writedown on the Tata Play investment.
Cruise Line Expansion Boosts Experiences Revenue
Resorts and vacations revenue jumped 17%, driven by a 10% increase in passenger cruise days following the launches of the Disney Destiny in November 2025 and the Disney Adventure in March 2026. Total Parks & Experiences domestic operating income surged 27% to $2.1 billion.