Given the market's bearish response to its fiscal first-quarter results, it would be easy to presume the worst of The Walt Disney Company (DIS -1.10%). To be fair, there are a few red flags buried in its Q1 numbers.
The House of Mouse is close to firing on all cylinders after being devastated by the pandemic.
Disney (DIS -1.10%) continues to report improved results on the bottom line, and this is before the company's most important product launch since Disney+. This fall, ESPN goes over the top and could make an already profitable streaming service a money-making machine.
Reporting results for their fiscal first quarter on Wednesday, Disney (DIS) and Qualcomm (QCOM) impressively exceeded earnings expectations while surpassing top-line estimates as well.
The Walt Disney Company NYSE: DIS is deep amid a business and market reversal that will increase its stock price by a high-double-digit to low-triple-digit amount over the next 12 to 18 months. The turnaround is driven by its CEO, Bob Iger, who has reinvigorated businesses, reclaimed operational quality, and set the entertainment company on a trajectory of sustained market-leading growth.
DIS' streaming success signals strong potential, but near-term headwinds suggest patience, indicating investors to hold the stock as the transformation unfolds in 2025.
The Walt Disney Company posted first-quarter earnings Wednesday that beat on the top and bottom lines but also revealed the start of predicted streaming subscriber losses at its Disney+ service.
In this video, I'll review Disney's (DIS -2.44%) first-quarter earnings report. Watch the short video to learn more, consider subscribing, and click the special offer link below.
I remain very bullish on The Walt Disney Company, maintaining a 'Strong Buy' rating due to its robust long-term prospects and recent strong quarterly results. Disney's Q1 2025 revenue of $24.69 billion and EPS of $1.40 exceeded analyst expectations, showcasing solid financial performance despite some weak spots. The streaming division, particularly Disney+ and Hulu, continues to grow, with increased subscriber revenue and a positive profitability outlook for the Direct-to-Consumer segment.
Disney's strategy emphasizes market share growth initially, followed by profitability increases, and then profitable growth. Cash flow, particularly from operations before working capital needs, is a critical metric for Disney's financial health and future guidance. Disney's focus on profit advances and cash flow guidance of $15 billion remains strong.
Declining cable-TV subscribers, box office flops in 2023, massive direct-to-consumer (DTC) streaming losses, rising costs for sports rights, proxy battles, and CEO succession issues have plagued Walt Disney (DIS -2.44%) shares. They are down 18% in the past five years, when the S&P 500 has put up a total return of 103%.
"The expectation is that we will continue to grow subscribers," says The Walt Disney Company CFO Hugh Johnston. He says the company will improve margins and is expected to make more than $1 billion in that business this year