Disney Beats Earnings Expectations in Fourth Quarter

Burbank, California-based The Walt Disney Company reported a better-than-expected adjusted profit in its fourth quarter, driven by strong results from its entertainment business and streaming service.

The company earned $460 million, or 25 cents per share, for the period ended September 28. This topped the $1.09 per share estimate made by Wall Street analysts surveyed by Zacks Investment Research. Shares jumped nearly 7% before the market open on Thursday.

Revenue climbed 6% to $22.57 billion, falling a bit short of expectations of $22.59 billion. However, operating income for the entertainment segment increased more than quadrupled to $1.07 billion.

The Walt Disney Co.'s direct-to-consumer business reported quarterly operating income of $253 million, compared with an operating loss of $420 million in the same period last year. Revenue rose 15% to $5.78 billion, driven by subscription revenue growth and increased advertising revenue.

Disney's Experiences division saw an operating income drop 6% to $1.7 billion. However, both domestic parks and experiences showed improvement, while international parks and experiences experienced a decline.

Looking ahead, Disney anticipates high-single digit adjusted earnings per share growth for fiscal 2025. The company predicts double-digit earnings per share growth for fiscal 2026 and 2027.

The entertainment giant also announced that it is searching for a new CEO to succeed Bob Iger, who is set to leave in December 2026. Disney's board has named Morgan Stanley executive James Gorman as its next chairman, starting on January 2, 2025. The new leadership change comes after the company had experienced clashes, missteps, and weakened financial performance under previous CEO Bob Chapek.