Walt Disney Co. (NYSE: DIS) saw its shares rise 10.54% on May 7 to close at $101.80. The dramatic rally of the company came after Disney, the entertainment giant, posted robust earnings and an optimistic outlook for fiscal 2025. The stock rose by $9.71 in a day, fueled by investors’ optimism about Disney’s streaming performance and steady theme park revenue.
Stunning Quarterly Earnings Surpass Projections
Disney reported adjusted per-share earnings in the three months upto March is $1.45. it has exceeded analysts’ expectations of $1.20. Revenue rose 7% to $23.6 billion from the same quarter last year, surpassing expectations of $23.14 billion. Operating income was $4.4 billion with solid margins in its segments.
CEO Bob Iger emphasized the company’s resilience amid economic uncertainties. “Despite questions around macroeconomic uncertainty or the impact of competition, I’m encouraged by the strength and resilience of our business,” he said.
Streaming Growth Leads the Way
Disney+ added 1.4 million new subscribers, a robust rebound after previous threats of subscriber loss. Hulu added 1.1 million users, and operating income of the streaming business increased from $47 million last year to $336 million this quarter. These outcomes vindicate Disney’s long-term plan of positioning its digital platforms as significant profit drivers.
Iger stressed streaming as a “true growth business,” with enhancements to ESPN’s live sport content, personalization potential, and international expansion plans.
Theme Parks and Cruises Remain Strong
The Experiences segment—which includes theme parks and cruise lines—recorded operating income of $2.5 billion, an increase of 9% compared with last year. Park attendance in U.S. parks remains healthy against the backdrop of inflation. Disney did acknowledge weakness at its Shanghai and Hong Kong parks owing to a slowdown in China’s economy.
The company reported a new Abu Dhabi theme park, representing the important international growth. At the same time, heavy bookings and good consumer ratings propelled the opening of the Disney Treasure cruise vessel.
Strong Forward Outlook for FY2025
Disney now sees adjusted EPS of $5.75 in fiscal 2025, up 16% from the previous year. Operating income in the entertainment segment will be rising by double digits. The Experience segment should rise 6%–8%.
According to CFO Hugh Johnston, Bookings for the next quarters are strong. Demand from healthcare and food companies remains strong for advertisers.
Stock Performance and Valuation
Despite the recent high, Disney shares remain 17% below their year-to-date level, falling behind the S&P 500’s 4.7% decline. The P/E ratio is at 33.05, with a dividend yield of 0.98%. The company has traded as high as $118.60 in the past 52 weeks and as low as $80.10.
Its market capitalization of $183.5 billion makes Disney still a giant in global media and entertainment. Tuesday’s surge signals fresh excitement around its diversified strategy and growth possibilities in earnings.
Bottom Line: Disney Back on Track
Walt Disney Co. is demonstrating that a well-balanced formula that is a good mix of streaming, parks, cruises, and large movies can thrive even in challenging times. With the company doubling down on innovation and global expansion, its stock can preserve long-term value for growth investors.
