Disney Stock Rises As Investors Savor Q1 Beat, In-line FY25 Guidance: Retail Thrilled

Walt Disney Co.’s (DIS) stock rose in Wednesday’s premarket session after the entertainment giant reported better-than-expected fiscal year 2025 first-quarter results. Investors shrugged off a modest subscriber loss for the Disney+ streaming business and guidance for a further dip.

Burbank, California-based Disney reported first-quarter earnings per share (EPS) of $1.76, up from $1.22 a year earlier, and above the estimate of $1.45. 

Revenue increased 5% year over year to $24.7 billion, higher than the $24.67 billion Street estimate.

Entertainment business revenue grew 9% to $10.87 billion, thanks to a 34% jump in content sales and licensing. 

Direct-to-Consumer (DTC) revenue was up a more modest 9% to $6.07 billion. 

Disney+ paid subscribers count fell 1% to 124.6 million but average monthly revenue per paid subscriber increased 5% to $7.55.

A Stocktwits poll conducted ahead of the quarterly results showed 67% of the respondents said the biggest factor impacting Disney’s quarterly results will be “streaming subscriber growth.”

The DTC business, which also includes Hulu, reversed to an operating income of $293 million from a loss of $138 million.

CEO Bob Iger said, “In fiscal Q1 we saw outstanding box office performance from our studios, which had the top three movies of 2024.”

Experiences revenue grew 3% to $9.42 billion, while Sports revenue remained flat at $4.85 billion. 

Disney’s segment operating income climbed 31% to $5.1 billion, with Entertainment witnessing a 95% jump.

Looking ahead, Disney guided to a modest YoY decline in Disney+ subscribers and it expects Sports segment operating income to be adversely impacted by about $150 million. 

The company estimates Disney Cruise Line pre-opening expense of about $40 million in the second quarter.

The company guided to high-single-digit adjusted earnings per share growth for the full year 2025, in line with the 8.8% growth the consensus currently models. It expects double-digit segment operating income growth for the entertainment segment, 13% for Sports, and 6% to 8% for Experiences. 

On Stocktwits, sentiment toward Disney stock stayed ‘extremely bullish’ (89/100) and message volume rose to ‘extremely high’ levels.

An optimistic user said the outlook for Disney Parks is "gangbusters,” while another remarked the company can stem Disney+ subscriber losses by streaming the top movies.

In premarket trading, Disney stock climbed 1.70% to $115.23. The stock is up 1.7% so far this year.

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