Disney’s Stock Surges as Streaming Profits Grow and Film Releases Shine

Walt Disney Co. reported an increase in streaming profits during the latest quarter, showing significant progress in its mission to turn its direct-to-consumer business from a loss-maker into a profitable operation.

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The improved performance in streaming contributed to a strong fiscal fourth-quarter report for the media and entertainment giant, sending its stock up nearly 9% during Thursday morning trading.

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One major factor driving investor optimism was Disney’s continued success in streaming profitability. In the previous quarter, Disney's direct-to-consumer streaming operations—previously a loss-making category—generated $47 million in operating income, marking its first profitable quarter and hitting that milestone sooner than anticipated. This quarter, Disney reported a substantial increase in operating income for the category, reaching $321 million.

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Disney CEO Bob Iger also pointed to the film division’s standout performance, calling it “one of the best quarters in the history of our film studio.” New releases such as “Inside Out 2” and “Deadpool & Wolverine” were top contributors, leading to a 39% increase in revenue for Disney’s content sales and licensing segment, which reached $2.59 billion. This division also returned to profitability, recording $316 million in profit.

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Disney also benefited from increased guest spending at its theme parks, which helped boost revenue for its experiences and parks segment, setting a new record for the business.

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Overall, Disney achieved $22.57 billion in revenue for the fiscal fourth quarter, marking a 6% year-over-year increase. This result slightly exceeded the $22.49 billion consensus among analysts polled by FactSet.

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Disney reported net income of $460 million, or 25 cents per share, a notable improvement from the prior year’s $264 million, or 14 cents per share. Adjusted earnings per share came in at $1.14, slightly above the $1.11 analysts had projected.

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Looking ahead, Disney provided guidance for the new fiscal year and beyond, projecting high-single-digit adjusted EPS growth in fiscal 2025. This outlook surpasses analyst projections, as they had estimated adjusted EPS growth to reach $5.17, about a 4% increase from Disney’s latest fiscal-year performance.

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Additionally, Disney shared its goals for shareholder returns, including a plan for dividend growth aligned with earnings growth and the intention to execute $3 billion in stock buybacks.

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