Walt Disney (DIS.US) surpassed revenue and profit expectations for the holiday quarter ending in December, driven by robust performance at its theme parks and the box office success of the animated film "Zootopia 2," propelling the company's stock to gain over 4% in Monday's pre-market trading. For the first quarter of fiscal 2026, ended December 27th, Disney's total revenue increased by 5% year-over-year to $26 billion, exceeding analysts' consensus estimate of $25.7 billion; the company reported a pre-tax profit of $3.7 billion, also higher than Wall Street's forecast of $3.5 billion. Adjusted earnings per share came in at $1.63, a 7% decline compared to the same period last year, yet still better than the analyst expectation of $1.57. The Experiences segment, encompassing theme parks, cruise lines, and consumer products, became the dominant revenue pillar: revenue for this division surpassed the $10 billion mark for the first time, contributing 72% of the company's nearly $5 billion in quarterly operating profit. Performance at the Walt Disney World Resort was particularly strong, showing significant year-over-year improvement as the Orlando parks had been closed in the prior-year quarter due to Hurricane Milton. Furthermore, the Disney Entertainment segment, which includes the film studio, television networks, and streaming services, reported revenue of $11.6 billion for the quarter, a 7% increase year-over-year. This growth was primarily fueled by theatrical releases during the holiday season: according to Comscore data, the animated sequel "Zootopia 2" has earned nearly $1.8 billion globally, while "Avatar: Fire and Ash" has surpassed $1.4 billion worldwide, with both films serving as the core box office drivers. However, the operating profit for this Entertainment segment fell by 35% compared to the previous year, attributed partly to high film marketing costs—"Avatar: Fire and Ash" was released in the final week of the fiscal quarter, during which the company invested heavily in marketing for that film and eight others, whereas only four films were released in the prior-year holiday season. Additionally, a $140 million decrease in political advertising revenue within the segment compared to the same period last year also weighed on profits. Notably, a two-week contract dispute with YouTube TV during the quarter left millions of subscribers unable to access ESPN and other Disney-owned channels, resulting in a $110 million loss for the company's Sports segment, where operating profit fell sharply by 23% year-over-year. Data showed that revenue for Disney's Sports business grew modestly by 1% to $4.9 billion, while operating profit declined to $191 million. The pressure on the Sports segment's performance stemmed not only from the aforementioned licensing dispute but also from rising programming production costs and a reduced number of NBA regular-season game broadcasts. Disney's combined streaming business (including Disney+, Hulu, and ESPN+) delivered a standout performance, with operating profit surging 72% year-over-year to $450 million, while revenue increased by 13% to $4.4 billion. Disney has ceased disclosing subscriber numbers for its streaming services. Looking ahead, Disney anticipates that Q2 operating profit for its Entertainment segment will be comparable to the year-ago period, but it forecasts its streaming business will achieve a $500 million profit, an increase of $200 million from the prior year. Disney also indicated that operating profit for the Experiences segment will see "modest" growth due to costs associated with new ship deployments and challenges in attracting international visitors, while the Sports segment's profit is expected to decrease by $100 million due to rising rights fees. For the full fiscal year, Disney reaffirmed its forecast for double-digit earnings-per-share growth relative to fiscal 2025 and expects full-year cash flow from operations to be $19 billion, with its $7 billion share repurchase program progressing on schedule. Amidst the earnings release, speculation about who will succeed Bob Iger as Chief Executive Officer has emerged as a key focus. This marks the second time Disney has sought a successor for Iger—after Bob Chapek took over in 2020, he was ousted just two years later, leading Iger to resume leadership. At that time, Disney's stock was under pressure, and the company urgently needed to revitalize its film and television business and rejuvenate park performance. The company's Chief Financial Officer, Hugh Johnston, stated, "The accelerated development of the parks business, streaming achieving profitability and reaching double-digit margins, and the ongoing improvement in the film business all provide a solid foundation for the new CEO." However, he declined to comment on potential candidates for the succession. According to people familiar with the matter, Disney's board is scheduled to meet this week and is expected to vote on Iger's successor. The company had previously indicated it would announce the successor within the first quarter of this year. Hollywood executives widely consider Josh D'Amaro, Chairman of Disney's Experiences division, to be the leading candidate.