Disney (NYSE:DIS) has offered investors a rare glimpse into its three-year financial outlook at a time of ongoing economic challenges, despite which the entertainment giant remains optimistic.
Shares soar by 10%
The company’s confidence in its investments across theme park expansions, film production and traditional television assets sent its shares soaring, with a 10% increase shortly after markets opened on Thursday.
The recovery in Disney’s stock is welcome news for shareholders, who had seen the company’s value decline by 17% since April’s 52-week high and nearly halve since 2021.
The company’s growth projections suggest a path forward as it balances the challenges in its traditional businesses with promising gains in newer revenue streams like streaming.
Net income for the fourth quarter rose 74% to $460 million, or 25 cents per share, bringing the entertainment giant’s full fiscal year earnings close to $5 billion.
Disney anticipates adjusted earnings per share (EPS) to grow in the high single digits in the upcoming fiscal year and achieve double-digit growth in fiscal 2026 and 2027.
Bump for streaming service
Disney also pointed to a turnaround in its streaming business, which had faced significant losses in recent years.
The streaming segment recorded a $321 million profit for the latest quarter, bringing its full-year profit to $134 million, a stark contrast to the $2.6 billion loss reported the prior year.
For the new fiscal year, Disney forecasts an $875 million increase in streaming profits, further strengthening its position in a competitive sector.
These gains come as Disney’s legacy television segment grapples with declining ad revenue and the ongoing shift away from traditional cable subscriptions.
Operating profits from cable and broadcast operations fell 38%, offset by strong performance in its “content sales” division.
In particular, box office successes from titles such as Deadpool and Wolverine, and Pixar’s Inside Out 2, contributed to a $725 million revenue boost.