Disney gains after the entertainment segment headlines the overall profit improvement

The Walt Disney Company (NYSE:DIS) edged higher in early reaction to the company’s FQ4 earnings report. Revenue growth of 6.3% year-over-year included gains across the Experiences (+1%) and Entertainment (+14%) segments, while the Sports segment saw flat revenue growth.

Disney (DIS) reported total segment operating income of $3.66 billion for the quarter that ended on September 28, vs. $3.71 billion consensus and $2.98 billion a year ago. The total was broken down by entertainment segment operating income of $1.07 billion vs. $1.16 billion, sports segment operating income of $929 million vs $904 million consensus, and experiences operating income estimate of $1.66 billion to match the consensus expectation. Notably, the entertainment segment operating income more than tripled year over year in FQ4.

Disney’s (DIS) EPS for the quarter landed at $1.14 vs. $1.11 consensus and $0.82 a year ago. Free cash flow was up 18% to $4.03 billion.

Disney+ Core subscribers were up 4% year-over to 122.7 million, vs. 119.9 million consensus. Disney+ Hotstar subscribers were up 1% to 35.9 million vs. 35.6 million consensus. Total Hulu subscribers edged up 2% to 52.0 million vs. 51.9 million consensus.

Average monthly revenue per paid Disney+ Core subscriber was up 1% Y/Y to $7.30 in FQ4.

“In Q4 we saw one of the best quarters in the history of our film studio, improved profitability in our streaming businesses, a record-breaking 60 Emmy Awards for the company, the continued power of live sports, and the unveiling of an impressive collection of new projects coming to our Experiences segment” stated Disney (DIS) CEO Robert Iger.

Looking ahead, Disney (DIS) sees high-single digit EPS growth in FY25 vs. the implied guidance of +4%. The media giant also expects approximately $15 billion in cash provided by operations, approximately $8 billion of capital expenditures, and is targeting dividend growth that tracks earnings. On the buyback front, Disney (DIS) set a target of $3 billion for the fiscal year.

Shares of Disney (DIS) gained 1.1% in early premarket action to $103.83 vs. the 52-week trading range of $83.91 to $123.74.