Disney gives investors years to cheer about

<i>Gabby Jones/Bloomberg via Getty Images via CNN Newsource</i><br/>Disney's streaming business just reported its most profitable quarter and the company forecast even better profits ahead.

By CNN Newsource

Published November 14, 2024 5:37 am

By Chris Isidore, CNN

New York (CNN) — Disney did something extraordinary Thursday, giving investors a rare three-year financial outlook, even at a time of economic uncertainty.

The company said that it has deep faith its investments in its massive park expansions, movie pipeline and even its linear television assets will pay off. Shares of Disney (DIS) are exploding higher – up 10% just after the market open Thursday.

Net income shot up 74% in the quarter to $460 million, or 25 cents a share, bring its full fiscal year earnings in just shy of $5 billion.

It said it expects adjusted EPS for the new fiscal year to rise in the high single digits, and double-digit adjusted EPS growth in fiscal 2026 and 2027, which runs through September of those years.

It also signaled that it has turned the corner on the streaming business, which only reported its first profitable quarter in the period ending in June when the segment posted a narrow $47 million profit. Thursday it reported profits soared to $321 million in the most recent quarter, bringing full year profits there to $134 million, compared to the $2.6 billion loss the previous fiscal year.

And it forecast profits from streaming will rise another $875 million in the new fiscal year, helping to lift results. Legacy media companies such as Disney that have gotten into streaming in the last five years have struggled to make the business profitable as they sought to catch up with Netflix, which had been the only profitable streaming service until recently.

Disney needs to have improved results from streaming as its cable and broadcast network business continues to suffer from a combination of ad sales declines an cord cutting by consumers. Operating profits from that segement plunged 38%. But that was balanced out by a $725 million jump in revenue from its “content sales” such as movie box office, as the its films Deadpool & Wolverine and the Pixar movie Inside Out 2 both set box office records.

The rise in Disney shares is good news for its shareholders, who have seen its stock lose 17% of its value since a 52-week high reached in April and almost half their value since 2021, coming out of the worst of the pandemic.