Disney's Earnings Hurdles Amid International Visitor Decline and Leadership Transition

Walt Disney's stock fell by nearly 7% due to declining international visitors and lower earnings in its TV and film division. Despite an increase in overall revenue, Disney faces challenges such as uncertain international tourism, leadership transition, and a faltering sports unit, affecting investor confidence.

Walt Disney's shares dropped nearly 7% in early trading Monday following the company's caution about declining international visitors to its U.S. theme parks and waning earnings in its TV and film operations. The company highlighted 'headwinds' among international visitors without specifying causes, focusing marketing on U.S. consumers due to 'less visibility' internationally, according to CFO Hugh Johnston.

The entertainment unit, encompassing film and television networks, reported a 35% decline in operating profit, associated with marketing costs of holiday movie releases. Although propelled by releases like 'Zootopia 2' and 'Avatar: Fire and Ash,' the unit felt financial pressures. Disney plans to announce a new CEO soon, with Josh D'Amaro, chairman of the experiences division, as a potential successor to replace Bob Iger.

The experiences unit, vital to Disney's earnings, reported $10 billion in revenue, significantly contributing to quarterly profits. U.S. anti-immigration policies contributed to a 6% decrease in foreign visitors, contrasting with a global tourism rise. Despite turbulent visitor numbers, Disney's overall revenue and income projections surpassed Wall Street estimates.

(With inputs from agencies.)