Disney (DIS) announced a 50% increase in its cash dividend on Wednesday, accompanied by fiscal first-quarter earnings that surpassed expectations, and a reduction in streaming losses. The stock experienced a nearly 12% surge in value on Thursday in response to the positive results.
The reported adjusted earnings per share were $1.22, significantly surpassing the $0.99 predicted by Bloomberg analysts. Disney also provided guidance for full-year fiscal 2024 earnings, projecting $4.60 per share, reflecting a minimum 20% increase from 2023.
While revenue slightly missed expectations at $23.5 billion compared to the anticipated $23.8 billion, Disney declared a cash dividend of $0.45 per share, marking a 50% increase from the previous dividend in January. Shareholders as of July 8 will receive the dividend on July 25.
Additionally, Disney’s board approved a new share repurchase program targeting $3 billion in purchases for fiscal year 2024.
Despite challenges in its linear TV and parks businesses, as well as streaming losses, Disney is actively addressing these issues. CEO Bob Iger has implemented cost-cutting measures, with the company on track to meet or exceed its $7.5 billion annualized savings target by the end of fiscal 2024.
The company made several significant announcements, including a $1.5 billion investment in Epic Games, emphasizing its entry into the world of video games. Disney+ will exclusively stream “Taylor Swift: The Eras Tour (Taylor’s Version),” and a sequel to “Moana” is set to hit theaters in November.
Moreover, Disney outlined plans for its ESPN streaming service, set to launch in fall 2025, and provided updates on its partnership with Warner Bros. Discovery and Fox to launch a new sports streaming service this fall.
In the streaming sector, Disney reported narrowed losses of $138 million, with an increase in streaming prices contributing to the improvement. While core Disney+ subscribers saw a slight sequential decline, the company expects to add 5.5 million to 6 million users in the second quarter.
Disney anticipates reaching profitability in its combined streaming businesses by the fourth quarter of fiscal 2024. The company is also implementing measures, including cracking down on password sharing, which is expected to show benefits in the latter half of the year.
The restructuring of Disney into three core business segments—Disney Entertainment, Experiences, and Sports—has shown positive results. Despite struggles in linear networks, the overall performance, especially in the entertainment and experiences divisions, reflects growth and improvement.
