The Walt Disney Company (DIS Quick QuoteDIS - Free Report) reported first-quarter fiscal 2025 adjusted earnings of $1.76 per share, which beat the Zacks Consensus Estimate by 22.2% and increased 44.3% year over year.

Revenues rose 4.8% year over year to $24.69 billion and beat the consensus mark by 0.1%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Segment Details

Media and Entertainment Distribution revenues (44% of revenues) increased 8.9% year over year to $10.87 billion.

Revenues from Linear Networks declined 6.6% year over year to $2.61 billion. Direct-to-Consumer revenues increased 9.5% year over year to $6.07 billion. Content Sales/Licensing and Other revenues grew 33.8% year over year to $2.18 billion.

Parks, Experiences and Products revenues (38.1% of revenues) rose 3.1% year over year to $9.41 billion. Domestic revenues were $6.43 billion, up 2.1% year over year. International revenues increased 11.5% year over year to $1.64 billion in the reported quarter. 

Meanwhile, revenues from Disney’s Consumer Products decreased 1.6% year over year to $1.33 billion.

Subscriber Details

As of Dec. 28, 2024, Disney+ had 124.6 million paid subscribers compared with 122.7 million as of Sept. 28, 2024. 

Domestic Disney+ average monthly revenue per paid subscriber increased from $7.7 to $7.99 due to increases in prices, partially offset by higher mix of subscribers to promotional offerings.

International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber increased from $6.78 to $7.19 due to increases in prices and higher advertising revenues, partially offset by a higher mix of subscribers to promotional offerings.

Hulu SVOD Only average monthly revenue per paid subscriber was comparable to the prior sequential quarter as lower advertising revenues were offset by increases in prices and higher mix of subscribers to multi-product offerings.

Operating Details

Costs & expenses remained flat year over year at $20.61 billion in the reported quarter.

Segmental operating income was $5.06 billion, up 30.5% year over year.

Media and Entertainment Distribution’s segmental operating income surged 94.9% year over year to $1.7 billion due to improved results at Direct-to-Consumer and Content Sales/Licensing and Other, partially offset by a decrease at Linear Networks.

Linear Networks’ operating income declined 11.2% to $1.09 billion. Domestic operating income remained flat year over year due to higher advertising revenues due to an increase in rates, partially offset by lower affiliate revenues attributable to fewer subscribers.

Direct-to-Consumer operating income was $293 million against the year-ago quarter’s loss of $138 million, primarily owing to subscription revenue growth attributable to higher rates due to increases in retail pricing across the company’s streaming services and subscriber growth.

Content Sales/Licensing and Other operating income were $312 million against an operating loss of $224 million reported in the year-ago quarter. The increase in operating results was due to higher theatrical distribution results reflecting the strong performance of Moana 2. The current quarter also included Mufasa: The Lion King while the prior-year quarter included The Marvels and Wish.

Parks, Experiences and Products’ operating income was $3.11 billion, up 0.2% year over year. 

The Domestic segment reported an operating income of $1.98 billion, down 4.6% year over year unfavorably impacted by Hurricane Milton and to a lesser extent, Hurricane Helena. Also, higher costs primarily due to the fleet expansion at Disney Cruise Line and inflation negatively impacted the segment’s operating results.

The International segment reported an operating income of $420 million, up 28% year over year, driven by growth in guest spending and higher volumes attributable to an increase in attendance.

Consumer Products’ operating profit increased 1.1% year over year to $708 million.

Balance Sheet

As of Dec. 28, 2024, cash and cash equivalents were $5.48 billion compared with $6 billion as of Sept. 28, 2024.

Total borrowings (including the current portion of borrowings) were $45.3 billion as of Dec. 28, 2024, compared with $45.81 billion as of Sept. 28, 2024.

Free cash flow was $739 million in the reported quarter.

Guidance

For fiscal 2025, Disney expects high-single digit adjusted EPS growth compared to fiscal 2024. The company expects more than $15 billion in cash provided by operations.

In Entertainment, the company expects double-digit percentage segment operating income growth compared to fiscal 2024. Disney projects Entertainment DTC operating income of approximately $875 million versus fiscal 2024.

The company expects a modest decline in the second quarter of fiscal 2025 Disney+ Core subscribers versus the first quarter of fiscal 2025. 

For Sports, Disney expects Segment operating income to be adversely impacted by approximately $100 million due to college sports and one additional NFL game, and about $50 million from exiting the Venu Sports JV.

In Experiences, Disney expects Disney Cruise Line pre-opening expense of approximately $40 million.

Zacks Rank & Stocks to Consider

Disney currently carries a Zacks Rank #4 (Sell).

Carnival (CCL Quick QuoteCCL - Free Report) , Wyndham Hotels & Resorts (WH Quick QuoteWH - Free Report) and Sony (SONY Quick QuoteSONY - Free Report) are some better-ranked stocks that investors can consider in the broader sector. Each of the three stocks carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Carnival have gained 71.1% in the past year. CCL is expected to report fourth-quarter 2024 results on Mar. 26.

Shares of Wyndham Hotels & Resorts have surged 35.6% in the past year. WH is slated to report fourth-quarter 2024 results on Feb. 12.

Shares of Sony have appreciated 15.4% in the past year. SONY is set to report fourth-quarter 2024 results on Feb. 13.