Disney Surpasses Expectations with Strong Earnings, Announces Dividend Increase

Disney (DIS) delivered robust fiscal first-quarter earnings on Wednesday, outperforming analyst expectations and announcing a significant boost in its cash dividend. The company’s streaming losses narrowed, further buoying investor confidence.

Earnings Beat and Fiscal Outlook

Adjusted earnings per share stood at $1.22, surpassing analyst estimates of $0.99, as polled by Bloomberg. Disney also provided upbeat guidance, forecasting full-year fiscal 2024 earnings of $4.60 per share, representing a minimum 20% increase compared to 2023.

Revenue Performance and Dividend Increase

While revenue slightly missed expectations at $23.5 billion versus the anticipated $23.8 billion, Disney announced a noteworthy 50% increase in its cash dividend to $0.45 per share. The dividend, payable on July 25, reflects the company’s commitment to enhancing shareholder returns.

Share Repurchase Program and Cost Reduction Initiatives

In addition to the dividend increase, Disney’s board approved a new share repurchase program targeting $3 billion in purchases for fiscal 2024. The company remains focused on cost-cutting measures to address ongoing challenges, aiming to achieve or exceed its $7.5 billion annualized savings target by the end of fiscal 2024.

Streaming Progress and Subscriber Trends

Disney saw substantial improvement in streaming losses within its entertainment division, narrowing to $138 million compared to $984 million in the previous year. While core Disney+ subscribers experienced a slight sequential decline due to price increases, the company remains optimistic about adding 5.5 million to 6 million new users in the second quarter.

Path to Profitability and Anti-Password Sharing Measures

Disney reiterated its commitment to achieving profitability in its streaming businesses by the fourth quarter of fiscal 2024. Initiatives to curb password sharing, coupled with recent price hikes, aim to bolster revenues, although significant benefits are expected to materialize in the latter half of the year.

Market Response and Future Outlook

Shares surged by as much as 8% in after-hours trading, reflecting investor enthusiasm for Disney’s earnings beat and strategic initiatives. With a focus on enhancing streaming profitability and executing cost-saving measures, Disney remains poised for continued growth and value creation in the evolving entertainment landscape.