Disney Posts a Big Profit Beat Amid Its Strengths in Sports and Experiences

Shares of Walt Disney Co. climbed in early Wednesday trading, approaching a two-month high, following stronger-than-expected quarterly earnings and an upbeat full-year forecast.

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The media and entertainment giant saw revenue come in just above Wall Street expectations. While its entertainment division, which includes Disney+, fell short, this was offset by stronger performances in its sports and experiences segments.

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Before the market opened, Disney’s stock rose 1.4%, putting it on track to reach its highest closing level since December 12.

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For the quarter ending December 28, Disney reported net income of $2.55 billion, or $1.40 per share, compared to $1.91 billion, or $1.04 per share, in the same period last year.

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Excluding one-time items such as restructuring costs, adjusted earnings per share (EPS) climbed to $1.76, up from $1.22 a year ago and surpassing the $1.45 EPS estimate from analysts surveyed by FactSet.

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Looking ahead, Disney reaffirmed its fiscal 2025 EPS growth target in the high single-digit percentage range. The current FactSet consensus of $5.41 per share suggests an 8.9% increase for the year.

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Revenue Performance

Disney’s total revenue rose 4.8% to $24.69 billion, slightly ahead of the $24.67 billion estimate from analysts.

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The company’s entertainment division posted $10.87 billion in revenue, marking an 8.9% increase but falling short of the $11.09 billion FactSet consensus.

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Within this segment, the direct-to-consumer (DTC) unit, which includes Disney+ and Hulu, reported $6.07 billion in revenue, up 9.5% from the previous year but missing the $6.14 billion estimate.

• Disney+ subscribers fell slightly to 124.6 million, down 0.6% from the prior quarter.
• However, average revenue per user (ARPU) rose to $7.55, up from $7.20.
• Hulu subscribers increased to 53.6 million, compared to 52 million previously.
• Hulu’s subscription video-on-demand (SVOD) ARPU dipped to $12.52 from $12.54, while the Live TV plus SVOD ARPU rose to $99.22, up from $95.82.

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CEO Bob Iger highlighted Disney’s box office success, noting that the company had the top three movies of 2024 and continued profitability improvements in its streaming business.Stronger-Than-Expected Sports and Experiences SegmentsDisney’s sports division brought in $4.85 billion in revenue, slightly higher than the $4.74 billion analysts expected.

• ESPN revenue surged 8.5% to $4.81 billion.
• However, Star India’s revenue plunged 90.2% to just $39 million.

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Meanwhile, the company’s experiences division—which includes theme parks and cruises—posted $9.42 billion in revenue, surpassing the $9.29 billion estimate.

• Revenue from parks and experiences grew 3.9% to $8.08 billion.
• Domestic park revenue rose 2.1% to $6.43 billion.
• International park revenue jumped 11.5% to $1.65 billion.

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Disney noted that Hurricane Milton and, to a lesser extent, Hurricane Helene, negatively impacted results. Walt Disney World had to close for a day, and a cruise itinerary was canceled.Stock PerformanceDisney shares have surged 17.3% over the past three months, significantly outpacing the Dow Jones Industrial Average’s 5.5% gain over the same period.As Disney continues to strengthen its financial performance, investors remain focused on whether its streaming, sports, and theme park segments can sustain momentum through 2024.