Walt Disney Company’s Full Year and Q4 2024 Earnings Results

The Walt Disney Company stock closed at the end of trading on Wednesday at $102.70 a share before reporting company earnings for the fourth quarter (Q4) and full fiscal year 2024 which ended on September 28, 2024 this morning.

Revenues increased 6% for Q4 to $22.6 billion from $21.2 billion in the prior-year quarter, and 3% for the year to $91.4 billion from $88.9 billion in the prior year. Income before income taxes declined 6% to $0.9 billion in Q4 from $1.0 billion in the prior-year quarter and increased 59% for the year to $7.6 billion from $4.8 billion in the prior year. Diluted earnings per share (EPS) for Q4 increased 79% to $0.25 from $0.14 in the prior-year quarter, and for the year more than doubled to $2.72 from $1.29 in the prior year.

“This was a pivotal and successful year for The Walt Disney Company, and thanks to the significant progress we’ve made, we have emerged from a period of considerable challenges and disruption well positioned for growth and optimistic about our future,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “Our solid performance in the fiscal fourth quarter reflected the success of our strategic efforts to improve quality, innovation, efficiency, and value creation. In Q4 we saw one of the best quarters in the history of our film studio, improved profitability in our streaming businesses, a record-breaking 60 Emmy Awards for the company, the continued power of live sports, and the unveiling of an impressive collection of new projects coming to our Experiences segment. As a result of our strategies and our focus on managing our businesses for both the near- and long-term, we are differentiating ourselves from traditional competitors, leveraging the deepest and broadest set of entertainment assets in the industry to drive attractive returns and further advance our goals.”

The Walt Disney Company achieved strong 23% growth in total segment operating income for Q4 and 21% for the year, and 39% growth in adjusted EPS(1) to $1.14 from $0.82 for Q4 and 32% to $4.97 from $3.76 for the year. Entertainment segment operating income improved significantly, to $1.1 billion, up $0.8 billion in Q4 versus the prior-year quarter. Entertainment Direct to Consumer (DTC) delivered 14% ad revenue growth in Q4, contributing to $253 million in operating income, and our combined DTC streaming businesses improved their profitability in Q4, with operating income(1) of $321 million. The company ended the quarter with 174 million Disney+ Core and Hulu subscriptions, and more than 120 million Disney+ Core paid subscribers, an increase of 4.4 million over the prior quarter. Pixar’s Inside Out 2 and Marvel’s Deadpool & Wolverine broke numerous box office records and helped drive $316 million in operating income at Content Sales/Licensing and Other in Q4. Sports segment operating income was $0.9 billion, a decline of $0.1 billion compared to the prior-year quarter. Domestic ESPN advertising revenue in Q4 grew 7% versus the prior-year quarter. The Experiences segment had record revenue and operating income for the full year. In Q4, Experiences revenue increased $0.1 billion, or 1%, and operating income of $1.7 billion was a decline of $0.1 billion, or 6% compared to the prior-year quarter. Domestic Parks & Experiences operating income increased in Q4, on comparable attendance to the prior-year quarter, driven by higher guest spending, partially offset by higher expenses and costs related to new guest offerings driven by Disney Cruise Line. International Parks & Experiences operating income declined in Q4.

Disney is confident in the long-term prospects for the business and believes the company is well positioned for growth.

The Experiences segment (which includes Disney Cruise Line), operating income in Q4 declined 6% as expected compared to the prior year as growth in Domestic Parks & Experiences was more than offset by a decline in International Parks & Experiences. Domestic Parks & Experiences operating income grew 5% in Q4, on comparable attendance to the prior year. Growth was driven by higher guest spending, partially offset by higher operating expenses and costs related to new guest offerings driven by Disney Cruise Line pre-opening costs associated with recent fleet expansion. International Parks & Experiences operating income in Q4 was impacted by Shanghai Disney Resort driven by lower attendance, Disneyland Paris reflecting the impact of the Olympics, and higher costs related to new guest offerings.

For fiscal 2025, Disney anticipates full-year operating income growth for the Experiences segment to be in the 6% to 8% growth range compared to fiscal 2024, with growth weighted to the second half of the year. Disney expects Ql operating income to be adversely impacted by approximately $130 million due to Hurricanes Helene and Milton and approximately $90 million due to pre-launch costs at Disney Cruise Line. The Walt Disney Company is excited about the outlook for the Experiences businesses, as they continue to execute on a strategy of pursuing investments to drive attractive returns, while aggressively managing the cost base and leveraging technology to create increased operational flexibility.

Capital expenditures increased to $5.4 billion from $5.0 billion due to higher spend on cruise ship fleet expansion and new attractions at the Experiences segment, partially offset by lower spend on Corporate facilities.

For the quarter, the increase in operating income at the domestic parks and experiences reflected guest spending growth attributable to increases in per capita guest spending at our theme parks and cruise line. Lower sales of Disney Vacation Club units. Higher costs primarily due to inflation, new guest offerings, increased technology spending and higher operations support costs, partially offset by the comparison to depreciation in the prior-year quarter related to the closure of Star Wars: Galactic Starcruiser.

International parks and experiences’ operating results decreased compared to the prior-year quarter due to lower volumes attributable to declines in attendance, an increase in costs primarily due to new guest offerings and higher depreciation, and a decrease in guest spending due to lower theme park per capita guest spending, partially offset by an increase in per room spending at our resorts.

According to Disney, the Experiences businesses remain best-in-class, serving as the places where the company’s brands and franchises come to life. The segment delivered record full-year revenue and operating income, despite some industry challenges that emerged in the second half of the fiscal year. Disney is confident in the long-term prospects for the segment and are committed to investing to drive continued growth. From theme parks in the U.S. and around the world, expanding Disney Cruise Line, and the opportunities from a relationship with Epic Games, this is an increasingly diversified business.

Disney Cruise Line’s fleet will grow to six ships after we unveil the Disney Treasure next week, and there are another seven cruise ships in development. Disney Cruise Line serves as an ambassador for our brand, bringing some of our most beloved IP into markets where we don’t have theme parks, allowing us to expand our global footprint by delivering our unmatched experiences to greater audiences.

Disney’s investment strategy in the Experiences segment is targeted in terms of projects and locations and is designed to drive operating income growth and attractive returns. Disney recently unveiled a robust slate of new projects coming to the theme parks tied to many of popular franchises, including:

Magic Kingdom is undergoing the largest expansion ever, including a new area inspired by Cars and a Villains themed land
Monsters, Inc. themed land coming to Hollywood Studios
New area with attractions themed to Encanto and Indiana Jones coming to Disney’s
Animal Kingdom
Doubling the size of Avengers Campus with two new attractions at Disney California
Adventure
First-ever ride-through attraction themed to Coco at Disney California Adventure
Avatar-themed destination coming to Disney California Adventure
First-ever ride-through attraction themed to The Lion King coming to
Disneyland Paris

All of these projects, as well as the company’s collaboration with Epic Games to bring an entirely new Disney universe and experience to Fortnite, demonstrate how Disney is leveraging their most popular IP and bringing it to life in innovative ways, highlighting the immense value of our brands and franchises, and their ability to create value across the various businesses units is a true differentiator.

Taken as a whole, The Walt Disney Company is very pleased with the performance in fiscal year 2024 across the company, both from a creative and a financial standpoint. Disney is well positioned for growth in 2025 as they continue to deliver on their strategic priorities while bringing fans and families more of the entertainment they love.

Disney Cruise Line is a six-ship vacation cruise line, which operates out of ports in North America, Europe and the South Pacific. The Disney Magic and the Disney Wonder are 85,000-ton 875-stateroom ships; the Disney Dream and the Disney Fantasy are 130,000-ton 1,250-stateroom ships; and the Disney Wish and the Disney Treasure, which was delivered in October 2024, are 140,000-ton 1,250-stateroom ships. The ships cater to families, children, teenagers and adults, with themed areas and activities for each group. Many cruise vacations include a visit to Disney’s Castaway Cay, a 1,000-acre private Bahamian island, or Disney Lookout Cay at Lighthouse Point, which opened in June 2024 on approximately 600 acres of land on the island of Eleuthera.

Following the upcoming launch of the Disney Treasure, Disney Cruise Line will be adding two new ships, the Disney Adventure and the Disney Destiny, which are scheduled to begin sailings in the first quarter of fiscal 2026. The Disney Destiny will be approximately 140,000 tons with 1,250 staterooms and will initially operate in North America. The Disney Adventure will be approximately 200,000 tons with approximately 2,100 staterooms and will initially operate in Southeast Asia.

Between calendar 2027 and 2031, the company plans to add four more new cruise ships, all of which are currently under contract to be built.

In July 2024, the Company entered into a licensing agreement with OLC, under which OLC will own and operate a Disney-branded cruise ship based in Japan. The ship is currently under contract to be built, with sailings expected to commence by 2029. The Company will earn royalties on revenues generated by OLC.

There were no additional details regarding Disney Cruise Line in the press release. We will update this post if we hear anything during the earnings call and Q&A.

For more information and an overall report click over to the Q4-2024 Earnings Report.
Appeared first on: Disneycruiselineblog.com

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