Disney Stocks Surge Following Robust Earnings Report and Disney+ Subscriber Growth

Disney’s stock experienced an upswing in late trading on Wednesday, buoyed by the company’s robust quarterly earnings that surpassed Wall Street’s estimates. The fiscal fourth-quarter results, which concluded on September 30, showcased a 5% revenue increase from the previous year, totaling $21.2 billion, slightly below the consensus estimate of $21.4 billion.

With earnings per share at 82 cents, up from 30 cents in the previous year, Disney managed to outperform the Street’s projection of 71 cents. Notably, the company’s Disney+ streaming service exhibited better-than-expected subscriber growth, with nearly seven million new core subscribers, bringing the total to 112.6 million, surpassing expectations by approximately three million subscribers.

In a move signaling their commitment to adapt to the evolving market, Disney disclosed that it currently has 5.2 million subscribers for its ad-supported Disney+ version, with more than half of new domestic subscribers opting for the ad tier. Notably, the company does not anticipate prioritizing efforts to curtail password sharing until 2025, while also projecting that streaming will achieve profitability in the fourth quarter of fiscal 2024.

Disney’s various segments demonstrated mixed performance, with the entertainment segment, encompassing movies and television, generating $9.5 billion in revenue, up 2% from the prior year. The sports segment, primarily ESPN, recorded revenue of $3.9 billion, remaining flat from the previous year. The experience segment, inclusive of theme parks, cruises, hotels, and licensed products, reported revenue of $8.2 billion, marking a notable 13% increase from the previous year.

Despite the positive developments, Disney’s stock had remained stagnant earlier in the year, facing challenges from diminished results at ESPN, sluggish growth in the streaming sector, and the ongoing decline of linear TV viewership. Looking ahead, Disney aims to trim costs, with management targeting an annualized efficiency goal of $7.5 billion, up from the previous target of $5.5 billion.

CEO Robert Iger emphasized the progress made during the past year, signaling a shift from a period of stabilization to a phase of growth for the company. As Disney continues to strategize for the future, investors and industry analysts eagerly await the implementation of potential restructuring and strategic initiatives.