Disney expects a more than $1 billion profit in its streaming division for its 2025 fiscal year, the company said Thursday in its quarterly earnings release, much to the delight of investors.
A fireworks display at Shanghai Disney Resort on Tuesday.
Shares of Disney climbed 10% to $113 at market open, hitting its highest intraday share price since early May as Wall Street responded favorably to better-than-expected quarterly earnings and guidance.
The company said it expects a $875 million jump in operating profits for its direct-to-consumer entertainment division which includes its Disney+, Hulu and ESPN+ streaming services for the 12-month period ending next September.
That equates to $1.01 billion profit guidance for the unit, which brought in $143 million in Disney’s 2024 fiscal year, which in turn was a major improvement from years of massive losses, with the streaming division losing $8.2 billion from the 2021 to 2023 fiscal years.
The company’s fourth fiscal quarter results shared Thursday were also strong, as its $1.14 earnings per share and $22.57 billion revenue topped consensus analyst estimates of $1.11 and $22.49 billion, respectively, according to FactSet.
Disney partially attributed the Q4 performance to strong results from the films “Deadpool& Wolverine” and “Inside Out 2,” the top two grossing films worldwide in 2024 with more than $1.3 billion apiece in box office revenue, according to BoxOfficeMojo.
“We, in many respects, have already consolidated. We don't really need more assets right now, either from a distribution or from a content perspective, to thrive,” Disney’s chief executive Bob Iger said on a conference call Thursday when asked about if the company’s mergers and acquisitions strategy shifted since the election of Donald Trump for a second presidential term as the market views another Trump administration as a potential boon for dealmaking.
Disney is on pace for its second-best day on the stock market of the last three years, trailing only the 11.5% gain on February 8, 2024.
Even after Thursday’s rally, Disney stock remains more than 40% below its March 2021 all-time high of more than $200 per share. Though Disney’s bottom line has improved noticeably since Iger returned to the top post in November 2022—its $5 billion net income in the fiscal year ending this September was 60% higher than the $3.1 billion profit brought in in 2022—but its stock performance has still lagged behind the broader market and Netflix, its top streaming rival.