DIS shares rallied 9% as it makes progress on profitability goals, boosts capital return plan.

Disney (DIS) reported its first-quarter earnings, surpassing expectations and showcasing solid performance across its various business segments. Despite the slightly lower-than-expected revenues, Disney's strong performance across various segments, increasing subscriber numbers, and commitment to enhancing shareholder value indicate a positive outlook for the company.

The company reported revenue of $23.55 billion, an increase of 0.2% year-over-year, compared to analysts' estimates of $23.8 billion. The company's Entertainment segment reported revenue of $9.98 billion, a decrease of 6.5% year-over-year, compared to analysts' estimates of $10.52 billion. The Sports segment reported revenue of $4.84 billion, an increase of 4.2% year-over-year, compared to analysts' estimates of $4.62 billion. The company's Sports segment reported a significant increase in revenue and operating income, primarily due to higher subscription revenue and lower programming and production costs.

The Experiences segment reported revenue of $9.13 billion, an increase of 6.9% year-over-year, compared to analysts' estimates of $9.04 billion. 

The company's Adjusted EPS was $1.22, compared to analysts' estimates of $0.99. The company's total segment operating income was $3.88 billion, an increase of 27% year-over-year, compared to analysts' estimates of $3.3 billion.

The company's Entertainment operating income was $874 million, compared to analysts' estimates of $604.1 million. . The company's Entertainment segment reported a significant increase in operating income, primarily due to lower programming and production costs.

The Sports operating loss was $103 million, compared to analysts' estimates of a loss of $151.7 million. The Experiences operating income was $3.11 billion, compared to analysts' estimates of $2.99 billion.

The company's International segment reported a decrease in operating income, primarily due to lower affiliate revenue. The company's Domestic segment reported a decrease in operating income, primarily due to lower advertising revenue, lower network impressions, and a decline in affiliate revenue

Disney+ subscribers reached 149.6 million, just below the estimated 151.2 million. 

Disney demonstrated its commitment to shareholder value by announcing a 50% increase in its cash dividend and targeting a $3 billion share buyback in fiscal year 2024. 

The company expects its adjusted earnings per share for the full year to be approximately $4.60, well above analysts" estimates of $4.27. Disney remains on track to achieve or surpass its $7.5 billion annualized savings target by the end of fiscal 2024. 

ESPN+ subscribers reached 25.2 million, slightly below the estimated 26.39 million. However, Hulu and Live TV subscribers totaled 4.6 million, in line with the estimated 4.62 million. The total Hulu subscribers reached 49.7 million, surpassing the estimated 49.18 million. The average monthly revenue per paid subscriber also saw slight increases across the streaming platforms. 

Bob Iger, the Executive Chairman, expressed confidence in the company's continued success and stated that Disney is performing exceptionally well in its parks and resorts sector. Additionally, he outlined plans for new ESPN products and emphasized the solid overall quarter for Disney. H also announced a partnership with Fortnight producer Epic which will see DIS move deeper into the gaming segment as it challenges Netflix (NFLX) in that space. 

Looking ahead, Disney projects ongoing positive momentum in subscriber net additions and average revenue per user for its streaming platforms in the second quarter. The company expects full-year 2024 earnings per share to increase by at least 20% compared to 2023, reaching $4.60. 

Disney announced plans to increase its cash dividend by 50% to $0.45 per share. It also authorized a $3 billion share buyback program. 

$DIS(DIS)