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01/10 00:30
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with increased operating income across segments and successful strategic initiatives like the ESPN direct-to-consumer launch. The Q&A session reveals optimism for future cash flow and growth in various business areas, despite some uncertainties like the YouTube TV dispute. The integration of Hulu into Disney+ and partnerships like the NFL deal are positive indicators. However, the lack of detailed guidance on certain issues tempers the overall sentiment slightly. Given these factors, a positive stock price movement between 2% to 8% is expected.
Adjusted EPS for fiscal 2025 up 19% from fiscal 2024. This growth is attributed to leveraging creative and brand assets and progress in direct-to-consumer businesses.
Share repurchases in fiscal 2025 $3.5 billion. This is set to double to $7 billion in fiscal 2026, reflecting increased return of capital to shareholders.
Cash dividend per share in fiscal 2025 $1, a 50% increase to $1.50 per share announced for fiscal 2026.
Retail sales for Stitch from Consumer Products eclipsed $4 billion in fiscal 2025, showcasing the franchise's enduring strength and effective strategy in popular stories and characters.
The Walt Disney Studios global box office revenue crossed $4 billion for the fourth consecutive year, driven by successful films like Lilo & Stitch and Predator: Badlands.
Streaming business operating income in Q4 up 39% year-over-year. For the full year, operating income reached $1.3 billion, up $1.2 billion from last year, attributed to a unified app experience and strategic content investments.
ESPN network ratings up 25% over the prior year quarter, driven by the launch of ESPN's full direct-to-consumer service and enhanced app features.
Experiences segment operating income in Q4 up 13% year-over-year, with full-year operating income up 8%, supported by record performance and strategic investments in theme parks and cruise ships.
Film Studios: Disney's live-action Lilo & Stitch became the highest-grossing Hollywood film globally this year, achieving 14.3 million views in its first 5 days on Disney+. Retail sales for Stitch surpassed $4 billion in fiscal 2025. Disney Studios delivered 4 global franchise hits earning over $1 billion each in the past 2 years. Upcoming releases include Zootopia 2, Avatar: Fire and Ash, and Toy Story 5.
Television Content: Strong viewership in Q4 with hits like FX's Allien: Earth, Season 2 of High Potential, and ABC's Dancing with the Stars. Upcoming titles include Percy Jackson & The Olympians and Taylor Swift's End of an Era docuseries.
Streaming Business: Operating income grew 39% in Q4, reaching $1.3 billion for the year, up $1.2 billion from last year. Hulu became the global general entertainment brand, and efforts are underway to consolidate entertainment content into a single app.
Cruise Ships: Two new cruise ships, Disney Destiny and Disney Adventure, are set to launch, with the latter being the first homeported in Asia.
International Expansion: Investing in local storytelling and licensing content to expand international reach for streaming platforms. Disney Adventure cruise ship will be homeported in Asia, marking a strategic move into the region.
Direct-to-Consumer (DTC) Business: Achieved $1.3 billion in operating income for the year, a significant turnaround from a $4 billion operating loss three years ago. Unified app experience being rolled out to enhance user experience and unlock value.
Sports Streaming: Launched ESPN's full direct-to-consumer service and enhanced ESPN app with new features like Multiview and live game stats. ESPN network ratings increased by 25% year-over-year.
Capital Allocation: Targeting $7 billion in share repurchases in 2026, double the amount in 2025. Cash dividend increased by 50% to $1.50 per share.
Theme Parks and Cruise Expansion: Expansion projects underway at all theme parks, with 5 additional cruise ships planned beyond fiscal 2026 and a new theme park in Abu Dhabi.
Economic and Geopolitical Conditions: The company acknowledges risks related to economic and geopolitical uncertainties, which could impact its operations and financial performance.
Competition: Competitive pressures in the entertainment and streaming industries are highlighted as a risk, particularly as the company continues to expand its direct-to-consumer (DTC) offerings.
Regulatory Developments: Legal and regulatory changes are mentioned as potential risks that could affect the company's strategic plans and operations.
Market for Advertising: The market for advertising is identified as a risk factor, which could influence revenue generation, particularly in the streaming and media segments.
Execution Risks: Execution risks related to the company's strategic initiatives, such as app consolidation and international expansion, are noted as challenges.
Supply Chain and Operational Risks: While not explicitly mentioned, the expansion of cruise ships and theme parks implies potential supply chain and operational risks.
Adjusted EPS Growth for Fiscal 2026: The company expects to deliver double-digit adjusted EPS growth compared to the prior year.
Share Repurchases in 2026: Targeting $7 billion in share repurchases, double the $3.5 billion repurchased in fiscal 2025.
Dividend Increase: The Board has declared a cash dividend of $1.50 per share, a 50% increase over the $1 paid to shareholders in fiscal 2025.
Film Studios Future Releases: Upcoming titles include Zootopia 2, Avatar: Fire and Ash, The Devil Wears Prada 2, The Mandalorian and Grogu, Toy Story 5, the live-action Moana, and Avengers: Doomsday.
Streaming Business Expansion: Plans to consolidate entertainment content domestically within a single app, expand international reach with local storytelling, and roll out a unified app experience.
ESPN Direct-to-Consumer Service: Launch of ESPN's full direct-to-consumer service and enhanced ESPN app with new features like Multiview, SportsCenter for You, and live game stats.
Cruise Ship Expansion: Two new cruise ships, Disney Destiny and Disney Adventure, joining the fleet, with the latter being the first ship homeported in Asia. Five additional cruise ships are scheduled for launch beyond fiscal 2026.
Theme Park and Resort Expansion: Expansion projects underway at all theme parks, a new theme park planned for Abu Dhabi, and the opening of World of Frozen at Disneyland Paris in spring.
Cash Dividend: The Board has declared a cash dividend of $1.50 per share, a 50% increase over the $1 paid to shareholders in fiscal 2025.
Share Repurchase: The company is targeting $7 billion in share repurchases in 2026, double the $3.5 billion repurchased in fiscal 2025.
The earnings call highlights strong financial performance with increased operating income across segments and successful strategic initiatives like the ESPN direct-to-consumer launch. The Q&A session reveals optimism for future cash flow and growth in various business areas, despite some uncertainties like the YouTube TV dispute. The integration of Hulu into Disney+ and partnerships like the NFL deal are positive indicators. However, the lack of detailed guidance on certain issues tempers the overall sentiment slightly. Given these factors, a positive stock price movement between 2% to 8% is expected.
The earnings call highlights several positive developments: 20% EPS growth, strong performance in the Experiences segment, and increased sports viewership. The Q&A section reveals optimistic management sentiment, especially regarding ESPN's NFL deal and the integration of Hulu into Disney+. Despite some deferred guidance, the overall outlook is positive, with strong domestic park performance and new cruise line expansions. These factors suggest a likely stock price increase, aligning with positive sentiment.
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