Disney's shares experienced an upward surge early Thursday morning.
Walt Disney's (DIS -1.48%) shares took off early Thursday, rising as high as 11.8%. As of 11:59 a.m. ET, the stock was still up 6.7%.
The spark that propelled the entertainment giant higher was its quarterly financial report, which included a few delightful surprises for investors.
Sprinkling some fairy dust
For the fiscal year 2024's fourth quarter (ending Sep. 28), the company reported a 6% increase in revenue to $22.6 billion. However, it was the bottom-line results that truly enchanted, as the company's cost-saving measures were proving successful and boosting profitability. Adjusted earnings per share (EPS) surged 39% to $1.14.
For comparison, analysts' consensus estimates were predicting revenue of $22.49 billion and adjusted EPS of just $1.11. Thus, Disney effortlessly cleared both hurdles.
The headline was profitability for the company's entertainment streaming segment, encompassing Disney+ and Hulu. The segment reported an operating profit of $253 million, surpassing Wall Street's expectations of $131 million. Moreover, Disney hinted that it expects this profitability to more than triple to $875 million in 2025.
CEO Bob Iger and CFO Hugh Johnston noted the success of several strategic initiatives during the previous fiscal year. Disney regained its footing with several box office hits, such as Inside Out 2 and Marvel's Deadpool & Wolverine, which "shattered numerous box office records, becoming the top two movies of the year to date." The company also boasted of its record-breaking night at this year's Emmys, which resulted in "a record-breaking 60 Emmy Awards."
Disney anticipates its winning streak to continue. For the 2025 fiscal year (commencing Sep. 29), the company is projecting high-single-digit adjusted EPS growth and dividend increases commensurate with its increase in profitability. Management is also forecasting double-digit EPS growth in both fiscal 2026 and fiscal 2027.
Despite these impressive results, Disney stock remains reasonably priced, trading at just 21 times forward earnings -- a bargain for a company with so many paths to victory.
Investors were delighted by Disney's finance performance, as the company's strong quarterly report led to increased profitability. With adjusted EPS surging 39% to $1.14, Disney was able to easily surpass analysts' expectations, giving investors a good reason to consider investing more money in the entertainment giant.
