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Walt Disney Co (NYSE:DIS) reported mixed third-quarter results for calendar year 2025, pitting stronger profitability and streaming growth against weaker revenue and a costly distribution blackout with YouTube TV. The results have drawn the attention of investors in media and communication ETFs that hold significant Disney exposure.
Disney’s uneven quarter and ongoing blackout could weigh on funds such as the Communication Services Select Sector SPDR Fund (NYSE:XLC) and the Vanguard Communication Services ETF (NYSE:VOX), as Disney is among their top 10 holdings.
XLC, with more than $25 billion in assets under management, tracks large-cap communication and entertainment names such as Meta Platforms, Inc. (NASDAQ:META), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), and Disney, meaning volatility in Disney’s shares can subtly shift fund performance. Also, the fund is a high-beta one (1.03, according to Benzinga Pro), which means it is highly volatile and sensitive to movements in its underlying stocks.
Meanwhile, VOX, which also has a mix of traditional broadcasters and streaming giants, may face near-term pressure if investor sentiment toward legacy media weakens. Like XLC, the fund’s beta is on the higher side, at 1.08, indicating high volatility.
At the same time, the ETFs could benefit if Disney’s profitability improvements and growing streaming base outweigh temporary revenue setbacks.
Revenue of $22.46 billion came in 1.3% below consensus estimates, while adjusted earnings per share of $1.11 surpassed forecasts by 8.4%. Operating margins reached 15.5% compared with 12.6% in the year-ago period, reflecting healthy cost control across Disney’s studio and direct-to-consumer segments. Disney+ added 3.8 million subscribers during the period to bring its total to 131.6 million.
Still, the numbers were overshadowed by the company’s dispute with Google’s YouTube TV, which pulled Disney’s channels on Oct. 30 after contract talks collapsed. The blackout, now entering its third week, is estimated by Morgan Stanley to be costing Disney about $30 million a week in lost affiliate fees. The company warned investors it couldn’t predict the duration or financial impact of the disruption.
For ETF investors betting on a media sector recovery, Disney’s ability to navigate the flare-up with YouTube will be watched closely. In funds such as XLC and VOX, the episode highlights that even dominant entertainment players remain vulnerable to platform dependence, where the battle for distribution rights is apt to shake up portfolios far beyond Hollywood.
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