Image Source: Pixabay

Walt Disney Co (NYSE: DIS) is trading up in extended hours on Wednesday after reporting better-than-expected per-share earnings for its fiscal first quarter.

DTC performance and future outlook

Also a positive for the entertainment conglomerate was its DTC loss that narrowed further to $138 million in Q1 versus close to $1.0 billion last year.

Walt Disney Co raised its earnings guidance for fiscal 2024 today to $4.60 a share that suggests a 20% growth versus last year. Bob Iger – its chief executive said in a press release today:

We believe the stage is now set for significant growth and success, including ample opportunity to increase shareholder returns as our earnings and free cash flow continue to grow.”

Disney+ lost 1.3 million subscribers in the first quarter due to price increases. Wall Street currently has a consensus “overweight” rating on DIS.

Disney Q1 earnings snapshot

• Operating income printed at $3.87 billion up from $3.04 billion
• Per-share earnings also climbed from 77 cents to $1.04
• Adjusted EPS printed at $1.22 as per the press release
• Revenue was roughly flat year-over-year at $23.55 billion
• Consensus was 99 cents a share on $23.64 billion in revenue

The earnings release arrives a day after ESPN revealed plans of partnering with Warner Bros. Discovery and Fox to launch a joint sports streaming platform later this year. CEO Iger also said on Wednesday:

We have turned the corner and entered a new era for our company, focused on fortifying ESPN, building streaming into a profitable growth business and turbocharging growth in parks and experiences.

ESPN will roll out its direct-to-consumer (DTC) service in late 2025, he added.

Segment results and stake in Epic Games

Other notable figures in the earnings report include $9.9 billion in revenue from entertainment (down 7.0%) while the experiences segment gained 7.0% on a year-over-year basis in Q1.

Sports brought in $4.84 billion for Disney in the recently concluded quarter. According to CEO Bob Iger:

 

As we build for the future, the steps we are taking today lend themselves to solidifying Disney’s place as the preeminent creator of global content.

Also on Wednesday, the mass media giant announced a $1.5 billion stake in Epic Games – the company behind Fortnite with whom it plans on working with on new content. Disney stock is now up well over 15% versus its year-to-date low.

Disney boosts shareholder returns

Note that the Walt Disney Co. is currently in a proxy fight with activist investor Nelson Peltz (read more) even after it raised its cost cutting target by a whopping $2.0 billion and announced plans of investing some $60 billion in its theme parks segment.

The New York listed firm confirmed in its earnings print today that it’s on course to “meet or exceed” its goal of cutting at least $7.5 billion in costs by the end of its current financial year.

Disney raised its quarterly dividend as well by a whopping 50% on Wednesday to 45 cents a share and announced a $3.0 billion stock repurchase programme to further move the need in its favour in its ongoing battle with Nelson Peltz.

I predict that Elon Musk & Nelson Peltz are planning a takeover bid of Walt Disney.

Nelson Peltz has been actively buying up shares of Disney to get access to seats on the boards of Disney.

Combine that with this comment from Elon Musk at an event with his friend Nelson. pic.twitter.com/fGqvEcypzN

— MERICA MEMED (@Mericamemed) February 7, 2024

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