Disney's Streaming Profits and Park Rebound Drive Growth: Analyst
Thursday, Nov 14, 2024 2:53 pm ET
4min read Disney's fiscal fourth-quarter 2024 earnings report has analysts buzzing, with the company's streaming profits and theme park rebound leading the way. Disney's adjusted profit of $1.14 per share, driven by strong results from its streaming service and box office hits like "Inside Out 2" and "Deadpool & Wolverine," exceeded Wall Street's expectations. The company's revenue climbed 6% to $22.57 billion, with operating income for the entertainment segment more than quadrupling to $1.07 billion.
Disney's direct-to-consumer business, which includes Disney+, Hulu, and ESPN+, reported quarterly operating income of $253 million, compared to an operating loss of $420 million a year earlier. The combined streaming businesses achieved profitability for the first time in the third quarter, with operating income of $321 million on revenue of $6.3 billion. Disney+ saw a 2% increase in paid subscribers domestically and a 5% rise internationally, ending the quarter with more than 120 million Disney+ Core paid subscribers.
Analysts have taken notice of Disney's streaming success, with Guggenheim analyst Michael Morris raising his stock price target to $215, citing the rebound in the theme parks business. Morris noted that the state of California has allowed Disneyland to return to full capacity, with Disneyland Paris reopening on Thursday. He anticipates that strong demand and a high level of execution will support a steep recovery rate, with fiscal 2022 revenue matching 2019 levels.
Disney's theme parks business surged in the most recent quarter, with domestic parks revenue doubling to $7.23 billion. The company's theme parks segment, which includes Disney's well-known theme parks as well as resorts, cruise ships, and other experiences, was hit heavily by pandemic-related shutdowns throughout 2020 and 2021. Now, the recent earnings release could signal that the company is not only recovering strongly from the early stages of the pandemic but also that it is weathering political backlash over its ongoing clashes with Florida lawmakers.
In conclusion, Disney's streaming profits and theme park rebound have analysts bullish on the company's prospects. With strong results from its streaming service and box office hits, as well as a surge in theme parks revenue, Disney is well-positioned for continued growth. As the company continues to invest in new attractions and expand its content library, investors can expect Disney to maintain its competitive edge in the entertainment industry.
Disney's direct-to-consumer business, which includes Disney+, Hulu, and ESPN+, reported quarterly operating income of $253 million, compared to an operating loss of $420 million a year earlier. The combined streaming businesses achieved profitability for the first time in the third quarter, with operating income of $321 million on revenue of $6.3 billion. Disney+ saw a 2% increase in paid subscribers domestically and a 5% rise internationally, ending the quarter with more than 120 million Disney+ Core paid subscribers.
Analysts have taken notice of Disney's streaming success, with Guggenheim analyst Michael Morris raising his stock price target to $215, citing the rebound in the theme parks business. Morris noted that the state of California has allowed Disneyland to return to full capacity, with Disneyland Paris reopening on Thursday. He anticipates that strong demand and a high level of execution will support a steep recovery rate, with fiscal 2022 revenue matching 2019 levels.
Disney's theme parks business surged in the most recent quarter, with domestic parks revenue doubling to $7.23 billion. The company's theme parks segment, which includes Disney's well-known theme parks as well as resorts, cruise ships, and other experiences, was hit heavily by pandemic-related shutdowns throughout 2020 and 2021. Now, the recent earnings release could signal that the company is not only recovering strongly from the early stages of the pandemic but also that it is weathering political backlash over its ongoing clashes with Florida lawmakers.
In conclusion, Disney's streaming profits and theme park rebound have analysts bullish on the company's prospects. With strong results from its streaming service and box office hits, as well as a surge in theme parks revenue, Disney is well-positioned for continued growth. As the company continues to invest in new attractions and expand its content library, investors can expect Disney to maintain its competitive edge in the entertainment industry.
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