the Walt Disney Stock Climbs on Upbeat Q4 Earnings Report

The Walt Disney Stock Climbs on Upbeat Q4 Earnings Report

The Walt Disney stock soars in the pre-market trading Thursday following the release of better-than-expected fourth-quarter earnings. The entertainment powerhouse also revealed plans to extend its cost-cutting efforts under the leadership of CEO Bob Iger.

The Walt Disney Company (NYSE: DIS) reported adjusted earnings of 82 cents per share, excluding certain items – a significant surge of 173% compared to the 30 cents per share recorded last year. The revenue also climbed by 5% to $21.24 billion.

Earnings outperformed FactSet expectations of 71 cents per share, but sales growth fell below the anticipated $21.37 billion. However, Disney’s experiences segment revenue beat estimates, increasing by 13% to $8.16 billion.

The highly successful Disney+ streaming service reported 150.2 million subscribers at the end of the quarter, outperforming forecasts of 148.7 million. This showcases a significant boost compared to the 146.1 million Disney+ subscribers reported in Q3 and 164.2 million in Q4 2022.

The overall direct-to-consumer revenue rose by 12% to $5.04 billion, while ESPN revenue remained flat at $3.91 billion year-over-year.

During a call with analysts, CEO Bob Iger announced an expansion of the company’s cost-cutting drive. He noted that Disney aims to achieve $7.5 billion in cost reductions, up from the initial target of $5.5 billion.

Disney anticipates a significant improvement in free cash flows in 2024, approaching pre-pandemic levels, thanks to ongoing restructuring efforts.

In a recent development, Disney revealed plans to acquire the remaining 33% stake in Hulu from Comcast (CMCSA)-owned NBC Universal for approximately $8.61 billion by December 1, with the deal expected to close in the 2024 calendar year.

In addition, The Walt Disney Company (NYSE: DIS) revealed plans to launch its ESPN BET online sportsbook on November 14 across 17 states in the U.S., pending final approvals. ESPN has officially integrated ESPN BET odds into its editorial and content, with the Daily Wager program set to rebrand as ESPN BET Live starting November 10.

The Walt Disney stock surged by 4% in response to these developments, adding to the 4.23% increase from last week triggered by the Hulu and ESPN BET announcements.

Despite a steady downtrend earlier this year, The Walt Disney stock shows signs of a strong rebound as it tackles content costs and welcomes the return of theme park traffic from pandemic-related shutdowns. As of Wednesday’s close, Disney stock has only faded 2.6% in 2023.