Disney Earnings Were Spectacular and an Anti-Bitcoin Zag
Every time I start to feel iffy about Disney, about their potential, about my investment in them, they pull me back in. I’m like Michael from Godfather III or Silvio from The Sopranos. We’re going to chat about my relationship with Disney, their most recent earnings, and where I think they/we will go from here. Then, we will chat about Bitcoin. I read a really interesting article from the Wall Street Journal about Bitcoin and the perhaps undue hopes that Crypto bros feel.
Okay, Disney earnings. Let’s go through the numbers. Earnings per share was $1.14, higher than the $1.10 that was expected. Revenue was $22.57, higher than the $22.45 that was expected. Net income about doubled from last year at $460 million. Disney revenue was up 6% compared to this time last year.
Total operating income came in a $3.66 billion, 23% higher than this time last year. The entertainment division, which includes streaming, traditional TV networks like ABC and ESPN, and films grew revenue by 14% since this time last year to $10.83 billion, driven by a very strong box office so far this year, with movies like Inside Out 2 becoming the highest grossing animated movie ever and Deadpool and Wolverine becoming the highest grossing R-rated movie ever. Inside Out 2 made over $1.6 billion, while Deadpool and Wolverine grossed over $1.3 billion.
Over $1.1 billion of that $14 billion in revenue from the entertainment division was pure profit, and Moana 2 and that other Lion King movie both have not been released yet. Disney+, Hulu, and ESPN+ reported operating income of $321 million compared to a $400 million loss last year. Disney+ subscribers grew by 4 million, while Hulu subscribers grew by around 1.5 million this quarter. Revenue per subscriber did drop by four cents though, but that is almost entirely due to the creation of the ad-supported tier. Disney parks grew revenue by 1%.
Okay, that was quite a bit of data. Let’s do the actual analysis now. This report was overwhelmingly positive. The only negatives, like a continued drop in linear TV revenue and higher costs from ESPN, were expected and ultimately, pretty inconsequential. There is so much in that data that is good, I do not even know where to start.
I’ll start first with something I did not mention, Disney’s guidance, which they rarely, if ever, publish. Disney put out super positive guidance on every front for 2025, 2026, and 2027. This very rare guidance indicates a high amount of confidence for the coming years. For example, Disney is projecting six to eight percent growth for profits in their parks division. Higher profit projection is great too because Comcast’s Universal Parks have been in the toilet too, showing weakness on their end.
As CNBC put it, “During Disney’s fiscal 2025, the company expects high-single-digit adjusted earnings growth compared with the prior fiscal year. The company expects double-digit adjusted EPS growth in both fiscal 2026 and 2027.”
Operating income, EBITDA, streaming revenue, streaming profits, parks profit, everything is projected to increase and keep going up into the pass-off from one CEO to the next. Disney+ and Hulu both are expected to achieve a 10% margin in the fiscal 2026, compared to the 6% Wall Street had earlier expected.
Revenue is higher than ever, but margins are still 11% lower than they had been at Disney’s peak. Overall, I am extremely optimistic about Disney’s future and its ability to grow its margins. I will continue to hold the company at least until Bob Iger leaves, or if this data pans out against me. I am back on the Disney train more than ever.
