Disney reported adjusted earnings of $1.22 per share, surpassing expectations of $0.99 projected by Bloomberg analysts. The company anticipates full-year fiscal 2024 earnings to reach $4.60 per share, indicating a growth of at least 20% compared to 2023. Although revenue slightly missed expectations at $23.5 billion instead of the projected $23.8 billion, Disney made significant announcements.
Disney
Disney declared a cash dividend of $0.45 per share, reflecting a 50% increase from the last dividend paid in January. This dividend will be payable on July 25 to shareholders of record as of July 8. Additionally, the board approved a new share repurchase program, targeting $3 billion in purchases for fiscal 2024.
The company has been grappling with challenges, including a declining linear TV business, slower growth in its parks segment, and streaming losses. Despite these hurdles, Disney CEO Bob Iger has committed to cost-cutting measures. The company is on track to meet or exceed its $7.5 billion annualized savings target by the end of fiscal 2024.
Following the results, Disney shares surged as much as 8% in after-hours trading, emphasizing the positive market response to the earnings report.
Disney’s strategic announcements include a $1.5 billion investment in Epic Games, the creator of Fortnite, marking Disney’s significant entry into the world of video games. Disney+ will exclusively stream “Taylor Swift: The Eras Tour (Taylor’s Version),” and a sequel to the animated film “Moana” is set to hit theaters in November.
Furthermore, revealed a more defined timeline for its ESPN streaming service, which is expected to launch in fall 2025. This comes in conjunction with Disney’s collaboration with Warner Bros. Discovery and Fox to launch a new sports streaming service, slated to debut in the fall of this year.
In terms of streaming profitability, narrowed losses within the entertainment division to $138 million from $984 million in the previous year. However, core Disney+ subscribers, excluding Disney+ HotStar in India, fell sequentially by 1.3 million due to increased streaming prices.
Disney acknowledges the loss of subscribers and anticipates adding 5.5 million to 6 million core Disney+ users in the second quarter. The company expects continued positive momentum in average revenue per user (ARPU) after core Disney+ ARPU increased sequentially by $0.14 compared to the fourth quarter. Disney aims to achieve profitability in its combined streaming businesses by the fourth quarter of fiscal 2024.
Despite recent price hikes, Disney will start implementing crackdowns on password sharing, though notable benefits are not expected until the second half of this year.
The earnings report also highlighted the company’s revamped reporting structure, with three core business segments: Disney Entertainment, Experiences, and Sports. Each segment performed well, contributing to a total segment operating income of $3.88 billion, a 27% increase compared to the same period last year. Entertainment operating income rose above 100% year-over-year to $874 million, and the experiences division achieved all-time records in revenue, operating income, and operating margin. The sports segment reported a 37% improvement, despite an operating loss of $103 million.
In summary, Disney’s robust earnings, strategic investments, and ambitious streaming plans position the company for continued growth and resilience in the evolving entertainment landscape.
