Walt Disney reported Q4 earnings that topped all Wall Street's estimates on Thursday, November 14, propelled by blockbuster ticket sales from the rude and irreverent summer Marvel film Deadpool & Wolverine. The media giant also provided an upbeat forecast for the coming year.
The company projected adjusted earnings-per-share percentage growth in the high single digits in fiscal 2025, even with roughly $8 billion capital expenditures. It also said it expects to buy back $3 billion worth of stock. Disney's stock jumped 10.2 per cent to $113.17, its highest share price in six months. Later, shares gained as much as 12 per cent in New York, the most since February.
The entertainment giant's recent success at movie theatres helped offset a decline in operating income at the company's Experiences and Sports divisions. Lower attendance at international locations dragged on theme park results, and higher programming and production costs hurt ESPN.
Disney reported adjusted per-share earnings of $1.14 for its fiscal fourth quarter, which ended in September. Revenue reached $22.6 billion, slightly ahead of Wall Street forecasts of $22.45 billion. Operating income rose 23 per cent from a year earlier to nearly $3.7 billion.
Growth in the streaming business offset the continued decline in traditional TV networks, including ABC and cable channels such as FX and the Disney Channel. Operating income in the unit tumbled 38 per cent to $498 million.
Chief Executive Bob Iger, who returned to the company from retirement in November 2022, undertook aggressive cost-cutting and worked to revitalize the company's film and TV units after a period of misfires. "We've emerged from considerable challenges and disruption," Iger told investors. “We're well positioned for growth.”
Operating income at the Entertainment unit, which includes film, television and streaming, more than doubled to $1.1 billion in the quarter, reflecting the return of Hulu's Emmy-nominated comedy "Only Murders in the Building" and summer movies, including "Deadpool & Wolverine," the first R-rated Marvel film, and "Alien: Romulus." The "Deadpool" movie brought in $1.3 billion at global box offices.
Disney's flagship streaming video service, Disney, boasted more than 122.7 million subscribers outside of India, a gain of 4.4 million from the prior quarter. In September, the company intensified efforts to crack down on password sharing. Disney, Hulu, and ESPN produced operating profits of $321 million for the quarter, marking the streaming services' second straight quarter of profitability.
Iger said Disney would add an ESPN tile to its Disney streaming service on December 4, preparing for the flagship sports network to begin streaming next fall. It will offer live sports and commentary, as well as new features, such as sports betting. In the future, he said it might even harness artificial intelligence to tailor the viewing experience, offering a personalized version of SportsCenter.
Disney's Experiences segment, which includes parks and consumer products, showed operating income declining six per cent to $1.66 billion. The company reported a 32 per cent drop in operating income at international parks, reflecting the costs to build new attractions and the competition in Paris from the Olympics.
At the Sports unit, which includes the ESPN network and Star India business, operating income fell five per cent to $929 million. ESPN experienced higher programming and production costs for college football broadcasts.
For the full year, domestic operating income is six per cent above 2023, with performance lifted by double-digit ad revenue growth. In addition to the fiscal 2025 projection, Disney expected double-digit adjusted EPS growth in fiscal years 2026 and 2027.
Disney saw a two per cent increase in paid subscribers domestically, including in the US and Canada. It had a five per cent rise internationally, excluding Disney HotStar. Disney ended the quarter with 174 million Disney Core and Hulu subscriptions, and more than 120 million Disney Core paid subscribers, an increase of 4.4 million over the prior quarter.
