‘Deadpool & Wolverine’ helps Disney beat Wall Street estimates: ‘Well positioned for growth’

Walt Disney reported earnings that topped Wall Street estimates on Thursday, boosted by blockbuster ticket sales from Marvel’s rough and tumble summer movie “Deadpool & Wolverine,” and gave an upbeat forecast for next year .

The company forecast adjusted EPS growth in the high single digits in fiscal 2025, even with capital expenditures of about $8 billion.

He also said he expects to buy back $3 billion in stock.

Disney shares rose 10.2% to $113.17, the stock’s highest price in six months.

The entertainment giant’s recent success in movie theaters helped offset a decline in operating income in the company’s Experiences and Sports divisions.

Lower attendance at international locations dragged down theme park results and higher programming and production costs hurt ESPN.

Disney reported adjusted earnings per share of $1.14 for the fiscal fourth quarter that ended in September. That compares with consensus estimates of $1.10 per share, according to analysts polled by LSEG.

Revenue came in at $22.6 billion, slightly ahead of Wall Street forecasts of $22.45 billion.

Operating income rose 23% from a year ago to nearly $3.7 billion.

Chief Executive Bob Iger, who returned to the company from retirement in November 2022, undertook aggressive cost-cutting and worked to revitalize the company’s film and television units after a period of failures.

“We have emerged from a period of significant challenges and disruption,” Iger told investors. “We are well positioned for growth.”

Disney last month said it would name a new chief in early 2026.

The new chief would replace Iger, who returned to the company to take the top job after the board fired its CEO-elect.

While peers like Warner Bros. Discovery CEO David Zaslav predicted the incoming Trump administration would bring a wave of media consolidation, Iger said Disney doesn’t need to do more deals to bolster its entertainment portfolio.

Its 2019 purchase of 21st Century Fox brought a collection of assets that fueled Disney’s record-breaking Emmy win, the blockbuster “Avatar” movie franchise and control of the Hulu streaming service.

“We are, in many respects, already consolidated,” Iger said. “We don’t need more assets right now, either from a distribution or content perspective, to fundamentally thrive in a disruptive media world.”

Disney CFO Hugh Johnston said Disney similarly considered, then rejected, divesting its television assets, which Comcast said it is currently discussing.

“As I went through the math … it was very clear to me that there was not a valuation opportunity for Disney,” Johnston said. “I can’t talk to other companies.”

Operating income in the Entertainment unit, which includes film, television and streaming, doubled to $1.1 billion in the quarter, reflecting the return of Hulu’s Emmy-nominated comedy Only Murders in the Building and summer movies including “Deadpool & Wolverine”. “Marvel’s first R-rated film and ‘Alien: Romulus.'” Deadpool brought in $1.3 billion at the worldwide box office.

Disney’s flagship video streaming service, Disney+, boasted more than 122.7 million subscribers outside India, a gain of 4.4 million from the previous quarter.

The company stepped up efforts to combat password sharing in September.

Disney+, Hulu and ESPN+ produced operating profit of $321 million for the quarter, marking the streaming services’ second consecutive quarter of profitability.

Iger said Disney will add an ESPN slate to its Disney+ streaming service on Dec. 4 as it prepares for the major sports network to begin broadcasting next fall. It will offer live sports and commentary, as well as new features such as sports betting.

In the future, it may even use artificial intelligence to tailor the viewing experience, offering a personalized version of SportsCenter, he said.

“It will be designed to serve the consumer in the most compelling way that ESPN has ever served the consumer,” Iger said.

Disney’s Experiences segment, which includes parks and consumer products, showed operating income fell 6% to $1.66 billion.

The company reported a 32% drop in operating income at international parks, reflecting costs to build new attractions and competition in Paris from the Olympics.

In the Sports unit, which includes the ESPN network and the Star India business, operating income fell 5% to $929 million.

ESPN experienced higher programming and production costs for college football broadcasts.

For the full year, domestic operating income is up 6% over 2023, with performance boosted by double-digit growth in advertising revenue.

In addition to the fiscal 2025 projection, Disney said it expected double-digit adjusted EPS growth in fiscal 2026 and 2027.

“If you add it all up, our strategies are working, working very well, and we have good visibility into where those strategies can take us,” Disney CFO Hugh Johnston said in an interview.