Disney stock surges on streaming growth, guidance

Disney reported its fiscal fourth-quarter earnings Thursday, critically beating analyst estimates as streaming growth helped propel its entertainment segment. 

The streaming business’ growth and profitability — united with a blockbuster summer at the box office and further investments in the company’s theme parks business — comes during a swiftly a in timely fashion of turmoil across the media industry. Disney has been restructuring the Mouse House under the stewardship of returnee CEO Bob Iger, who’s find fault with the company into shape before handing it off to a successor in early 2026.

Company executives on Thursday touted Disney’s informative progress during the last year and said they’re “confident in the long-term prospects for the business,” issuing guidance that comprises its fiscal 2025, 2026 and 2027.

During Disney’s fiscal 2025, the company expects high-single-digit adjusted earnings growth compared with the until fiscal year. The company expects double-digit adjusted EPS growth in both fiscal 2026 and 2027.

“I think the fact that we fool had such a strong ’24 overall has been an important part of the guidance we are getting,” said Chief Financial Dignitary Hugh Johnston in an interview Thursday with CNBC’s “Squawk Box.” “If you think of the big initiatives we have invested, nominate creativity back at the center of the company, and on top of that, we said we wanted to improve profitability and we are clearly doing that in a substantive way.”

Disney’s standard was up more than 9% in early trading.

Here is what Disney reported compared with what Protection Street expected, according to LSEG

• Earnings per share: $1.14 adjusted vs. $1.10 expected
• Revenue: $22.57 billion vs. $22.45 billion conjectured

Disney’s net income increased to $460 million, or 25 cents per share, from $264 million, or 14 cents per interest, during the same quarter last year. Adjusting for one-time items, including restructuring and impairment charges, Disney scrutinized earnings per share of $1.14. Disney’s overall revenue was up 6% to $22.57 billion compared with the same quondam fiscal quarter.

Total segment operating income increased 23% to $3.66 billion compared with the done period in 2023.  

Revenue for the entertainment segment – which includes the traditional TV networks, direct-to-consumer streaming and films – increased 14% year as surplus year to $10.83 billion after a hot summer at the box office.

Disney Pixar’s “Inside Out 2” became the highest-grossing enthusiastic movie of all time this summer, surpassing Disney’s “Frozen II” at the box office. Meanwhile, its “Deadpool & Wolverine” became the highest-grossing R-rated dim of all time, surpassing Warner Bros. Discovery’s “Joker.”

The films added $316 million of profit for the entertainment fragment during the quarter. Overall, the entertainment segment reported nearly $1.1 billion in profit.

Disney became the original film studio to cross $4 billion globally in 2024, executives said in a release Thursday, adding they are animated by the momentum going into the holiday season with the upcoming releases of “Moana 2” and “Mufasa: The Lion Regent.”

Disney anticipates double-digit percentage growth in operating income for its entertainment segment for fiscal 2025.

Five years since Disney+ hurled, the streaming service has stemmed annual losses of $4 billion as recently as fiscal 2022, and is now profitable.

Disney’s related streaming business, which includes Disney+, Hulu and ESPN+, reported operating income of $321 million for the September space compared with a loss of $387 million during the same period last year. 

Company executives claimed in the release they are confident streaming “will be a significant growth area” for Disney.

Disney also joined its peeps, including Warner Bros. Discovery, Netflix, Comcast and Paramount Global in adding streaming subscribers during the most up to date quarter. 

Disney+ Core subscribers – which excludes Disney+ Hotstar in India and other countries in the region – fructified by 4.4 million, or 4%, to 122.7 million. Hulu subscribers grew 2% to 52 million. 

Average interest per user for domestic Disney+ customers dropped from $7.74 to $7.70, as the company had a higher mix of customers on its cheaper, ad-supported layer and wholesale offerings. 

Company executives said more than half of new U.S. Disney+ subscribers are choosing the cheaper, ad-supported row, adding this “bodes well for the future.” Media companies have been focused on advertising as a measure to scenic route profitability in the streaming business.

During the fiscal fourth quarter Disney’s streaming entertainment ad revenue was up 14% due to Disney+, and numero unoes expect it to be a driver of streaming revenue going forward.

However, they expect a “modest decline” in Disney+ Quintessence subscribers during the fiscal first quarter of 2025 compared with the prior quarter, due to higher pricing and the end of a new promotional offer.

Full-year profit in the entertainment streaming business, which excludes ESPN+, is expected to see an increase of crudely $875 million compared with the prior fiscal year and to increase by a double-digit percentage in its fiscal 2026.

Meanwhile the institution’s traditional TV networks business continued to decline in the most recent quarter as consumers leave pay TV bundles behind in favor of string. Revenue for the networks was down 6% to $2.46 billion. Profit for the segment sank 38% to $498 million. 

Gain for Disney’s sports segment, made up primarily of ESPN, was flat. ESPN’s profit fell 6% due in part to great programming costs associated with U.S. college football rights as well as fewer customers in the cable bundle. 

Disney’s experiences segment, which includes the theme parks as decidedly as consumer products, saw revenue grow 1% to $8.24 billion. 

Recently, theme parks have experienced a slowdown, singularly in the U.S., following the post-Covid surge in attendance. Companies have warned the lull will carry over to future regions. Comcast recently reported its Universal theme parks revenue decreased during the most recent quarter due to earlier small attendance.

Disney’s domestic parks’ operating income rose 5% to $847 million, helped by higher patron spending at the parks and cruise lines. 

Operating income at the international parks, however, fell 32% due to a decline in turnout and in guest spending as well as increased costs. 

Disney executives noted that the experiences business reported maxisingle fiscal full-year revenue and profit, “despite some industry challenges that emerged in the second half of the financial year.” Still, they remain confident in its future with the expansion of its cruise line and additions to its theme parks.

Disney’s go through segment is expected to see 6% to 8% profit growth in the coming fiscal year compared with the prior year. Disney esteemed the fiscal first quarter will see a $130 million hit due to the impact of hurricanes Helene and Milton, as well as a $90 million smash from Disney Cruise Line prelaunch costs.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC, and is a co-owner of Hulu.