Disney’s Stock Dips After Revenue Miss, ($0.01) EPS in Q1, $1.21 Adjusted
The Walt Disney Company (NYSE: DIS) has recently unveiled its financial outcomes for the second quarter ended March 30, 2024, showcasing a mix of triumphs and challenges.
The entertainment giant reported a slight increase in revenues, which rose to $22.1 billion from $21.8 billion in the prior-year quarter. Despite this growth, diluted earnings per share (EPS) presented a stark contrast, turning from an income of $0.69 in the prior-year quarter to a loss of $0.01 in the current quarter. This decline was attributed to goodwill impairments, although partially offset by higher operating income in the Entertainment and Experiences sectors.
However, when excluding certain items, diluted EPS for the quarter increased to $1.21 from $0.93 in the prior-year quarter, indicating strong double-digit percentage growth in adjusted EPS and meeting or exceeding the company’s financial guidance for the quarter.
Disney Missed Revenue Forecasts for Q1
Comparing the current performance against expectations, The Walt Disney Company has demonstrated a resilient stance amidst economic uncertainties. Analysts had set the bar with expectations of an EPS of $1.1 and revenue of $22.12 billion for the quarter.
The actual revenue of $22.08 billion slightly missed these projections, while the adjusted EPS of $1.21 surpassed expectations, illustrating Disney’s capability to navigate through operational hurdles and still deliver commendable financial performance.
Disney is on Track to Generate $14 B, Sets Full Year Adjusted EPS Growth Target of 25%
Disney has provided optimistic guidance for the future, reflecting confidence in its strategic direction and growth trajectory. The company has set a new full-year adjusted EPS growth target of 25%, underpinned by its strong Q2 performance.
Disney remains on track to generate approximately $14 billion of cash provided by operations and over $8 billion of free cash flow this fiscal year, signaling healthy financial health and operational efficiency.
Furthermore, Disney’s Entertainment Direct-to-Consumer business turned profitable in the second quarter, with expectations of continued profitability in the combined streaming businesses in the fourth quarter. This is a significant indicator of Disney’s strategic investments in its streaming services paying off, positioning it well for sustained growth and profitability in the evolving entertainment landscape.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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