Shares of Walt Disney Company (DIS) stock surged on Thursday following a positive Q3 earnings report that exceeded expectations. Earnings, streaming profit, and guidance all popped in the recent quarter, suggesting a positive outlook for the remainder of Q4. Indeed, the company reported $22.57 billion in revenue, up from $21.24 billion last year. The number was also narrowly above the $22.50 billion analysts expected, according to Visible Alpha data.
Strong guidance for the next two years also fueled investor optimism, sending shares up over 10% in early trading. Disney stock has been up 7% since the markets opened. The media giant reported Q4 adjusted earnings of $1.14 per share, above the $1.10 expected by analysts polled by Bloomberg and higher than the $0.82 Disney reported in the prior-year period.
Disney Streaming Pumps Stock in Q3
A strong factor in Disney’s stock performance in Q3 was in its streaming business. The company’s direct-to-consumer streaming features ESPN+, Disney Plus, and Hulu, with all three performing well as of late. Disney’s streaming business posted an operating income of $321 million for the three months ending Sept. 28. That compares to a loss of $387 million in this period the prior year.
In mid-October, Disney raised the prices of its various subscription plans, a trend that other streaming platforms like Netflix have done this year. With these moves, media companies are attempting to boost margins on direct-to-consumer (DTC) offerings in the face of rising declines in television watchers. While some consumers were frustrated with the price hike, it didn’t seem to affect the number of subscriptions for any of Disney’s streaming services.
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Furthermore, Disney said Thursday that it expects DTC operating income of approximately $875 million in fiscal 2025. On the earnings call, Disney CFO Hugh Johnston noted gains in streaming serve as a “natural hedge” against struggling linear networks. This positive guidance was another catalyst for the stock’s price to pump throughout trading. At press time, DIS up up nearly 30% in the past three months.
