Box Office and Streaming Success Drive Growth
Disney’s shares rose by more than 6% after the success of the movie “Deadpool & Wolverine” and strong performance in their streaming business helped boost earnings by 39% compared to last year. The success of the movie, along with Pixar’s record-breaking “Inside Out 2,” reassured investors that Disney is back on track at the box office. CEO Bob Iger called it “one of the best quarters in our film studio’s history.”
Disney’s streaming services, including Disney+, Hulu, and ESPN+, also performed exceptionally well, generating a profit of $321 million—a significant improvement compared to the $387 million loss reported a year ago. This growth helped offset losses in Disney’s traditional TV business. As a result of these positive outcomes, Disney’s shares rose 6.3% by the end of the day on Thursday, marking their biggest jump since February.
Strong Holiday Season Anticipated
Disney is also expecting a strong holiday season with the upcoming releases of “Moana 2” and “Mufasa: The Lion King.” CFO Hugh Johnston emphasized that Disney’s creativity is back on track, which he believes is the most important factor for the company’s success.
Theme Parks and Cruise Lines: Challenges and Investments
Despite the strong earnings, there are still some concerns about Disney’s “experiences” division, which includes theme parks and cruise ships. Disney’s theme parks bounced back after the pandemic, but there was a slowdown over the summer as U.S. visitors spent less money. While U.S. parks saw improved revenues in the latest quarter, international parks like Disneyland Paris and Shanghai Disney continued to struggle. Even so, the division reported record yearly revenues and profits, and Disney expects attendance to grow in 2025.
Disney is investing heavily in its experiences division, planning to spend $60 billion on theme parks and cruise lines over the next ten years. The company projects the division will grow by 6% to 8% in 2024 and expects “high single-digit growth” in 2026, supported by the addition of two new cruise ships.
Financial Highlights
Disney reported $460 million in profit during the fourth quarter, up from $264 million the previous year. Adjusted earnings of $1.14 per share surpassed Wall Street’s prediction of $1.09, and revenue increased by 6% to $22.6 billion. Bob Iger, who returned to Disney after a brief retirement, initiated a major cost-cutting and restructuring plan. While Disney’s shares have risen since his return, they have still underperformed compared to the broader stock market.
Disney also announced plans to buy back $3 billion worth of shares in 2025 and stated that its dividend would grow in line with earnings.