Walt Disney (DIS 13.38%) reported fiscal first-quarter 2024 financial results for the period ended Dec. 30, 2023, after the market closed on Wednesday and investors liked what they saw. Shares were up 12.7% in early trading on Thursday and are still up 11.8% at noon E.T.
Three factors drove the media stock higher and they set the company up for even more long-term success.
Earnings and guidance
The first reason Disney stock is up is quarterly results. Revenue was flat versus a year ago at $23.55 billion but earnings of $1.22 per share easily passed the $0.99 that analysts were expecting. Cost-cutting measures have taken hold faster than expected and management said it expects to exceed its goal of $7.5 billion in cost cuts set in 2023.
Second, for the full fiscal year, management said it expects earnings to increase at least 20% to around $4.60 per share and free-cash-flow generation to be about $8 billion. Even streaming is expected to be profitable in the fourth quarter of the fiscal year (third calendar quarter).
Building for the future
On top of earnings, Disney announced a $1.5 billion investment in Fortnite maker Epic Games and said ESPN will launch a completely rebuilt app over the top in fall 2025.
If the current business is finally starting to turn around and Disney adds games and streaming apps in the future, this could become a growth company once again. For now, investors are believing in the turnaround at Disney and that’s why shares are up big on Thursday.