Shares of Walt Disney (DIS -1.95%) surged this week, jumping as much as 13.4%, according to data supplied by S&P Global Market Intelligence. By the time the market closed on Friday, the stock was still up 11.6%.
The catalyst that sent the media company higher was Disney’s quarterly-financial results and a number of ancillary announcements that put the magic back in the stock.
Bringing the magic
For its fiscal 2024 first quarter (ended Dec. 30), the company reported revenue of $23.5 billion, which was flat year over year. While that might not seem like reason to celebrate, the company’s cost cutting measures boosted profitability, as adjusted earnings per share (EPS) jumped 23% to $1.22. Disney said it is on track to “meet or exceed” its cost cutting goal of $7.5 billion by the end of fiscal 2024.
For context, revenue was in line with analysts’ consensus estimates, but Wall Street expected EPS of just $0.99, so Disney was more profitable by far.
While shareholders celebrated the financial improvements, there were a number of other developments that really got the party started.
- Disney said the company is on track and expects its streaming segment will turn profitable by the end of 2024. It went further, saying it “believes this business will be a key earnings growth driver” going forward.
- The company increased its semi-annual dividend by 50% to $0.45 per share, and the board of directors approved a $3 billion stock buyback for 2024.
- Disney’s ESPN entered into a new joint venture with Fox and Warner Bros. Discovery to create a new streaming sports service that will debut this fall. The company also announced that ESPN would launch as a stand-alone streaming service in 2025.
- Disney announced a $1.5 billion equity stake in Epic Games, creator of the iconic Fortnite video game. The company will lend its characters and stories from Marvel, Star Wars, Pixar, and Disney to create a “transformational new games and entertainment universe.”
- Disney+ will become the exclusive streaming home of Taylor Swift’s viral concert film Taylor Swift: The Eras Tour, Taylor’s Version.
Suffice it to say there was a lot for investors to like, with a little something for everyone. This could finally be the start of the turnaround that investors have been waiting for.
Danny Vena has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
