Disney Q4 Earnings Surpass Estimates, Revenues Increase Y/Y

The Walt Disney Company DIS reported fourth-quarter fiscal 2024 adjusted earnings of $1.14 per share, which beat the Zacks Consensus Estimate by 4.59% and increased 39% year over year.Revenues rose 6.3% year over year to $22.5 billion and missed the consensus mark by 0.9%.Segment DetailsMedia and Entertainment Distribution revenues (48% of revenues) increased 13.7% year over year to $10.82 billion.Revenues from Linear Networks declined 6.4% year over year to $2.46 billion. Direct-to-Consumer revenues increased 14.8% year over year to $5.78 billion. Content Sales/Licensing and Other revenues grew 39% year over year to $2.58 billion.Parks, Experiences and Products revenues (36.5% of revenues) rose 1% year over year to $8.24 billion. Domestic revenues were $5.52 billion, up 2.5% year over year. International revenues decreased 4.9% year over year to $1.58 billion in the reported quarter. Meanwhile, revenues from Disney’s Consumer Products increased 2.3% year over year to $1.13 billion.The Walt Disney Company Price, Consensus and EPS Surprise The Walt Disney Company price-consensus-eps-surprise-chart | The Walt Disney Company QuoteSubscriber DetailsDisney+, as of Sept. 28, 2024, had 122.7 million paid subscribers compared with 118.3 million as of June 29, 2024. Domestic Disney+ average monthly revenue per paid subscriber decreased from $7.74 to $7.70 due to a higher mix of subscribers to ad-supported and wholesale offerings, partially offset by higher advertising revenues.International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber increased from $6.78 to $6.95 due to a rise in retail pricing, partially offset by an unfavorable foreign exchange impact. Disney+ Hotstar’s average monthly revenue per paid subscriber declined from $1.05 to 78 cents due to lower advertising revenues. Hulu SVOD Only average monthly revenue per paid subscriber decreased from $12.73 to $12.54 due to lower advertising revenues and higher mix of subscribers to multi-product offerings.Operating DetailsCosts & expenses increased 3.5% year over year to $19.82 billion in the reported quarter.Segmental operating income was $3.65 billion, up 22.8% year over year.Media and Entertainment Distribution’s segmental operating income surged 352.1% year over year to $1.06 billion due to improved results at Direct-to-Consumer and Content Sales/Licensing and Other, partially offset by a decrease at Linear Networks.Linear Networks’ operating income declined 38.1% to $498 million. Domestic operating income declined due to lower advertising revenues attributable to a decrease in impressions reflecting lower average viewership, partially offset by higher rates.Direct-to-Consumer operating income was $253 million against the year-ago quarter’s loss of $420 million, primarily owing to subscription revenue growth attributable to higher rates due to increases in retail pricing across the company’s streaming services and subscriber growth.Content Sales/Licensing and Other operating income were $316 million against an operating loss of $149 million reported in the year-ago quarter. The increase in operating results was due to higher theatrical distribution results reflecting the strong performance of Inside Out 2 and Deadpool & Wolverine. The prior-year quarter also included Haunted Mansion.Parks, Experiences and Products’ operating income was $1.65 billion, down 5.7% year over year. The Domestic segment reported an operating income of $847 million, up 4.8% year over year due to guest spending growth attributable to increases in per capita guest spending at theme parks and cruise lines, offset by higher costs owing to inflation, increased technology spending and new guest offerings.The International segment reported an operating income of $299 million, down 32.2% year over year, driven by lower volumes attributable to a decline in attendance and a decrease in guest spending.Consumer Products’ operating profit increased 0.6% year over year to $513 million.Balance SheetAs of Sept. 28, 2024, cash and cash equivalents were $6 billion compared with $5.95 billion as of June 29, 2024.Total borrowings (including the current portion of borrowings) were $45.81 billion as of Sept. 28, 2024, compared with $47.5 billion as of June 29, 2024.Free cash flow was $4.02 billion in the reported quarter compared with $2.23 billion in the previous quarter. The company repurchased $2.99 billion worth of shares in the fiscal fourth quarter.GuidanceFor fiscal 2025, Disney expects high-single digit adjusted EPS growth compared to fiscal 2024 while targeting $3 billion in stock repurchases. In Entertainment, the company expects double digit percentage segment operating income growth compared to fiscal 2024, weighted to the first half of the year. Disney projects Entertainment DTC operating income of approximately $875 million versus fiscal 2024, which includes a comparison to an adverse impact of India DTC business of approximately $200 million on fiscal 2024 Entertainment DTC results.The company expects a modest decline in the first quarter of fiscal 2025 Disney+ Core subscribers versus the fourth quarter of fiscal 2024. The company expects first-quarter fiscal 2025 Content Sales/Licensing and Other operating income to be relatively in line with the fourth quarter of fiscal 2024. For Sports, Disney expects 13% segment operating income growth compared to fiscal 2024 on a reported basis. In Experiences, Disney expects 6% to 8% segment operating income growth compared to fiscal 2024, weighted to the second half of the year.For fiscal 2026 and 2027, the company expects double-digit adjusted EPS growth.Zacks Rank & Stocks to ConsiderDisney currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the broader sector that investors can consider are Paramount Global PARA, Carnival CCL and Flexsteel Industries FLXS, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Shares of PARAA have gained 14.8% year to date. The Zacks Consensus Estimate for PARA’s fiscal 2024 revenues is pegged at $29.11 Billion, indicating a year-over-year decrease of 1.82%. The consensus mark for earnings is pegged at $2.25 per share, which has gained 14.8% over the past 30 days.Shares of Carnival have gained 30.9% year to date. The Zacks Consensus Estimate for CVL’s 2024 revenues is pegged at $25.19 billion, indicating a year-over-year increase of 16.63%. The consensus mark for earnings is pegged at $1.31 per share, unchanged over the past 30 days.Shares of Flexsteel have gained 196% year to date. The Zacks Consensus Estimate for FLXS’ fiscal 2025 revenues is pegged at $433.08 million, indicating a year-over-year increase of 4.92%. The consensus mark for earnings is pegged at $3.25 per share, which has increased 8.3% over the past 30 days.Must-See: Solar Stocks Poised to SkyrocketThe solar industry stands to bounce back as tech companies and the economy transition away from fossil fuels to power the AI boom.Trillions of dollars will be invested in clean energy over the coming years – and analysts predict solar will account for 80% of the renewable energy expansion. This creates an outsized opportunity to profit in the near-term and for years to come. But you have to pick the right stocks to get into.Discover Zacks’ hottest solar stock recommendation FREE.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Carnival Corporation (CCL): Free Stock Analysis Report The Walt Disney Company (DIS): Free Stock Analysis Report Flexsteel Industries, Inc. (FLXS): Free Stock Analysis Report Paramount Global (PARA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks