Investors cheer as Disney projects big profit gain for year
Disney says cost-cutting boosts earnings rise 23% in the first quarter along with improved revenue in traditional businesses. It forecasts a full-year 20% earnings gain and says its streaming business should be profitable by year-end.
Shares of Walt Disney (DIS) jumped after hours after the company reported higher-than-expected earnings for its fiscal first quarter and forecast a 20% earnings gain in fiscal 2024.
The report came as the company has been cutting costs and reorganizing operations and is now in the middle of a proxy fight with two investor groups.
Shares jump after hours
Disney shares were up 7.6% to $107.20 at 4:20 p.m. after ending flat at $99.27 in regular trading.
The company earned an adjusted $1.22 a share in the quarter ended Dec. 30, up 23% from $0.99 a year ago. Revenue of $23.55 billion was up very slightly from $23.51 billion a year ago.
Related: Disney shakes up ESPN sports strategy ahead of earnings
Based on continued cost costs and better results overall, but especially from its streaming businesses, the Mouse House sees earnings per share hitting $4.60 a share for the current fiscal year, up from $3.76 in fiscal 2023.
The streaming business has been a sore spot for the company, losing $420 million in fiscal 2023. Image source: Shutterstock/TheStreet Illustration
CEO Bob Iger told CNBC the business should be profitable by the end of the fiscal year, as the company has been promising.
It still reported an operating loss of $138 million in the first quarter -- a big improvement from $984 million loss last year.
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Whether that makes the two investor groups waging proxy fights happy remains to be seen.
Trian Partners' Nelson Peltz is leading a charge to win two board seats at Disney's annual meeting in April.
A second group, the Blackwells Group, advocates breaking Disney into three pieces.
The company is working with three competitors to organize a streaming service centered on sports. Disney's ESPN network is one of the most powerful sports networks.
And it announced a $1.5 billion investment in EPIC games to develop Disney-themed games, Star Wars and other franchises.
Related: Veteran fund manager picks favorite stocks for 2024
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