Disney stock was soaring Wednesday after the company beat Wall Street's earnings target and unveiled a plan to build a theme park in Abu Dhabi, United Arab Emirates.
The House of Mouse reported adjusted quarterly earnings of $1.45 a share and revenue rose 7% from a year ago to $23.6 billion. Analysts expected an adjusted profit of $1.19 a share on revenue of $23.1 billion, according to a FactSet poll.
In morning trading, shares jumped 10% to $101.47. The stock was the best performer in the Dow Jones Industrial Average, which was up 0.5%, according to Dow Jones Market Data.
Revenue for Disney's experiences segment, which includes its theme parks, rose 6% from a year ago to $8.9 billion. The Street was looking for $8.7 billion. The solid parks revenue growth could help to reassure investors, who had been fretting that President Donald Trump's tariffs would drive up inflation and lead to Americans spending less on big-ticket items like vacations.
Shortly after it posted earnings, the company announced it would build a park on Yas Island in Abu Dhabi. It would be the company's seventh park and first in the Middle East.
"This groundbreaking resort destination represents a new frontier in theme park development," Josh D'Amaro, chairman of the company's experiences division, said in a statement. "Our resort in Abu Dhabi will be the most advanced and interactive destination in our portfolio."
The theme park, according to Disney's 10-Q filing, will be built and operated by Miral, a limited liability corporation in the UAE.
Disney will license its intellectual property to Miral and will earn royalties based on the project's revenue. Disney didn't rdisclose a launch date or size of the theme park, according to the 10-Q filing.
Miral, according to Disney, has developed several family destinations on Yas Island with American and European brands.
"It is all their capital and we will get a royalty. So there isn't ownership. We own our IP and license it to them as essentially the arrangement," Disney management said on the earnings call.
Disney's streaming division, which includes the Disney+ platform, added 2.5 million subscribers over the quarter ended March 31. Its operating profit rose to $336 million, up from $47 million a year earlier.
Disney said it was expecting adjusted earnings of $5.75 a share for its current fiscal year, which ends in September, although it noted that it will be monitoring macroeconomic developments that could shift its outlook. Analysts had been forecasting earnings of $5.43 for the current fiscal year.
The earnings beat ought to give the stock a much-needed boost: It's down 17% this year, compared with a 4.7% drop for the S&P 500. Rivals Netflix and Comcast are up 28% and down 8.1%, respectively.
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