Disney Stock Rises on Earnings Beat Dividends get a boost.

Shares of Walt Disney gained after entertainment giant Walt Disney posted better-than-expected profit in the December quarter.

Disney also provided revenue guidance for the September 2024 fiscal year, above Wall Street estimates. The company said it will raise its half-yearly dividend by 50%, while setting up a new $3 billion share buyback program.

In a separate announcement, Disney said it had agreed to invest $1.5 billion in Fortnite developer Epic Games. Disney and Epic will “collaborate on an all-new games and entertainment universe that will further expand beloved Disney stories and experiences,” the company said.

Disney shares rose 8% in premarket trading Thursday following Wednesday evening's report.

In the fiscal first quarter ended Dec. 30, Disney posted revenue of $23.5 billion, flat from a year ago and slightly below the Wall Street consensus estimate of $23.8 billion tracked by FactSet. Adjusted profit was $1.22 per share, ahead of the Wall Street consensus forecast of $1.01.

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Disney now expects earnings per share of $4.60 in fiscal 2024, ahead of Wall Street's consensus of $4.29 per share. The company said it continues to see full-year free cash flow of about $8 billion. Disney said it is on track to meet or exceed its goal of $7.5 billion in annual cost savings by the end of fiscal 2024.

The company continues to expect its streaming business to reach profitability in the fourth quarter of the current fiscal year.

Disney raised its semiannual dividend to 45 cents per share, giving the company a yield of about 0.8%. The company also said it plans to buy back $3 billion in shares in fiscal 2024.

Disney's core Disney+ subscribers fell 1.3 million to 111.3 million in the quarter, but the company expects net additions of 5.5 million to 6 million in the second quarter, including 7.5 million in the U.S. market, a slight decrease in international markets.

Late Tuesday, shortly before the earnings report, Disney's ESPN unit, Fox Corp. and Warner Bros. Discovery announced plans to create a paid streaming service to share game properties. The new platform will launch this fall, the companies said.

The service will cover professional and collegiate sports including football, basketball, baseball, hockey and soccer. The as-yet-unnamed streaming platform will be offered through a new app that allows consumers to bundle products with Disney+, Hulu and Max.

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In the company's earnings call, Disney CEO Bob Iger said ESPN will be offered as a full-fledged streaming service by the fall of 2025. Disney said it continues to look for potential “content and marketing partners” for ESPN. More to be announced about that initiative in the near future.

Iger also said the new sports package should appeal to viewers who aren't interested in paying for a full “big bundle” cable or satellite TV service. Asked about the risk of a sports joint venture accelerating cord-cutting, he said it should not affect his revenue from sports, but trade-offs from one to the other. “For us, it's very low risk,” he said.

Revenue in Disney's entertainment division was less than $10 billion, down 7%, short of the Wall Street consensus of $10.4 billion. Sports revenue, mostly from ESPN, was $4.8 billion, up 4% to $4.6 billion. Experience revenue, including theme parks, was $9.1 billion, up 7% and slightly ahead of estimates.

Iger said Disney is “off to a great start” with the ad-supported version of Disney+, and that progress so far has “exceeded every metric.” He said the company already has more than 1,000 advertisers worldwide. Iger also said the company has begun cracking down on password sharing to help drive subscriber growth for Disney+ over time.

Disney said it plans to release Mona 2A sequel to its popular Hawaiian animated film, in 2024.

Disney+ will begin airing a new version of Taylor Swift's popular Eras Tour movie starting March 15, the company said, with additional songs not included in the original version of the film.

And in an ESPN announcement, Iger said former University of Alabama football coach Nick Saban will join the network as an on-air commentator.

Eric J. at [email protected] Write to Savitz

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