MW Disney's stock surges as streaming profits grow and film releases shine
By Emily Bary
'Inside Out 2' and 'Deadpool & Wolverine' were big winners for Disney in the latest quarter
Walt Disney Co. saw streaming profits grow in the latest quarter, underscoring progress on the company's effort to transform direct-to-consumer distribution, recently a loss-making endeavor, into a financial engine.
That was one highlight in the media and entertainment giant's fiscal fourth-quarter report, which has shares rallying more than 6% in Thursday's extended session.
Another positive for Disney $(DIS)$ investors was the company's continued progress on streaming profitability. In the prior quarter, Disney's combined direct-to-consumer streaming businesses logged $47 million in operating income, which brought the category to profitability a quarter earlier than expected. This time around, Disney saw the category's operating income grow to $321 million.
Disney Chief Executive Bob Iger also called out "one of the best quarters in the history of our film studio." The company said "Inside Out 2" and "Deadpool & Wolverine." The performance of those films helped drive a 39% increase in revenue for the content sales and licensing business, to $2.59 billion. That unit also swung to a profit of $316 million.
See also: Paramount's earnings lag estimates as streaming gains are offset by weak film and TV revenue
Elsewhere, Disney saw guests spend more at its parks in the latest quarter, helping to drive record revenue for the company's experiences business.
Overall, Disney posted $22.57 billion in revenue for its fiscal fourth quarter, up 6% from a year before, while analysts tracked by FactSet had been expecting $22.49.
The company posted net income of $460 million, or 25 cents a share, compared with $264 million, or 14 cents a share, in the year-earlier period. On an adjusted basis, Disney posted $1.14 in earnings per share, above the $1.11 consensus view.
Disney also gave forecasts for the new fiscal year and beyond. It's looking for a high-single-digit rate of adjusted EPS growth in fiscal 2025, while analysts had been modeling $5.17 in adjusted EPS, up about 4% from what Disney posted in the latest fiscal year.
The company is targeting "dividend growth that tracks our earnings growth" as well as $3 billion of stock buybacks.
Disney models double-digit growth in adjusted earnings per share for fiscal 2026.
-Emily Bary
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November 14, 2024 07:35 ET (12:35 GMT)
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