Disney stock (DIS) popped on Thursday after the company reported fiscal fourth quarter earnings per share and revenue that topped Wall Street estimates and its direct-to-consumer business built on recent momentum and swung to a profit.
Strong guidance for the next two years also fueled investor optimism, sending shares up over 10% in early trading following the results. The stock pared gains slightly to just around 7% by afternoon trade.
The media and experiences giant reported Q4 adjusted earnings of $1.14 per share, above the $1.10 expected by analysts polled by Bloomberg and higher than the $0.82 Disney reported in the prior-year period.
Revenue came in at $22.57 billion, outstripping consensus expectations for $22.47 billion as well as the $21.24 billion reported in the year-ago period.
Disney’s direct-to-consumer (DTC) streaming business — which includes Disney+, Hulu, and ESPN+ — posted operating income of $321 million for the three months ending Sept. 28. That compares to a loss of $387 million in the prior-year period.
Analysts polled by Bloomberg had expected DTC operating income to come in around $203 million after the company reached its first quarter of streaming profitability in its Q3 results.
Achieving consistent profits in streaming is critical for Disney and other media giants amid a growing shift by consumers to DTC services from traditional pay-TV packages.
In mid-October, the company hiked the price of its various subscription plans, highlighting a trend that has gained traction over the past year. With such moves, media companies are attempting to boost margins on direct-to-consumer (DTC) offerings in the face of rising declines in linear television.
Disney said Thursday that it expects DTC operating income of approximately $875 million in fiscal 2025.
On the earnings call, Disney CFO Hugh Johnston noted gains in streaming serve as a “natural hedge” against struggling linear networks, which saw revenue fall 6% while operating income for the segment plunged 38% compared to the prior-year period.
Management warned linear…
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