Disney Expects Strong Earnings Growth in Fiscal 2025

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By Brian Nelson, CFA

Disney (DIS) recently reported better than expected second quarter fiscal 2025 results, with both revenue and non-GAAP earnings per share beating the consensus forecast. Revenue increased 7% to $23.6 billion, while income before income taxes increased $2.4 billion, to $3.1 billion. Total segment operating income increased 15%, to $4.4 billion in the quarter. Adjusted earnings per share increased 20%, to $1.45 from $1.21 in the second quarter of fiscal 2024. Management had the following to say about the results:

Our outstanding performance this quarter—with adjusted EPS up 20% from the prior year driven by our Entertainment and Experiences businesses—underscores our continued success building for growth and executing across our strategic priorities. Following an excellent first half of the fiscal year, we have a lot more to look forward to, including our upcoming theatrical slate, the launch of ESPN’s new DTC offering, and an unprecedented number of expansion projects underway in our Experiences segment. Overall, we remain optimistic about the direction of the company and our outlook for the remainder of the fiscal year.

Looking to all of fiscal 2025, Disney expects adjusted earnings per share of $5.75, a 16% increase over 2024 levels. Cash provided by operations is targeted at $17 billion, benefiting from a $2 billion increase from the deferral of tax payments. Disney is targeting a double-digit increase in operating income for its Entertainment segment for the year, while Sports is expected to increase 18% with respect to segment operating income in fiscal 2025. Its Experiences segment is targeted for 6%-8% operating income growth for the year. We like Disney, but view shares as fairly valued at the moment. Shares yield 0.9% at the time of this writing. 

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