Disney Finally Stops the Cash Bonfire… Streaming Profits Push The Stock to Six-Month High

Look who decided to stop lighting money on fire! The Mouse House is finally on the upswing—and it’s all thanks to Disney figuring out how to make money from their streaming empire. This morning, Disney stock shot up nearly 10% to a six-month high, leaving the investors beaming and maybe, just maybe, giving Bob Iger an excuse to take a day off from “operation save-the-Magic-Kingdom.” 

For the last few years, Disney’s streaming business was about as profitable as a restaurant during pandemic lockdown. Between 2021 and 2023, the division dropped $8.2 billion. But now the company has managed to turn things around. Q4 earnings revealed that Disney’s streaming services (Disney+, Hulu, and ESPN+) posted $321 million in profit this quarter. And investors? They’re happier than a little girl who just met Elsa in real life.

This is the second quarter in a row that Disney’s streaming division has been in the green, with CEO Bob Iger crediting the shift to ad-supported plans. Nearly 60% of new subscribers are picking up the cheaper, ad-laden version of Disney+, a trend that apparently “bodes well for the future.” 

Of course, it wasn’t just streaming profits that powered Disney’s Q4 magic. This summer, Disney’s movie lineup hit paydirt with Deadpool & Wolverine and Inside Out 2. Both movies brought in over $1.3 billion each, propelling Disney’s entertainment division revenue up 14% year-over-year. Altogether, these hits brought in $316 million in profit.

And with Moana 2 and Mufasa: The Lion King ready to drop, Disney’s not slowing down on the blockbuster front. The House of Mouse even became the first studio to break $4 billion globally this year, proving that despite their ups and downs, they still know how to pack theaters.

(Source: Bleeding Cool)

Bob Iger, the man who practically invented the modern Disney empire, has been on a mission to reshape the company since he returned to the CEO role in 2022. He’s not only steered Disney’s streaming into the black but he’s even predicting more than $1 billion in streaming profits by 2025. It’s a big goal, but with the current momentum, Iger and Disney might just pull it off.

And while we’re talking profits, Disney’s already cooking up plans to bring ESPN+ content directly into Disney+ by December, adding even more value to the platform. Iger also hinted that Disney might start rolling out paid password sharing in Latin America (a little “borrowed” move from Netflix’s playbook) as an extra revenue stream (pun intended).

Now to the bad news… Disney’s theme parks, the division that kept the cash flowing during the streaming drought, is showing signs of wear. Domestic parks saw a minor jump in sales, but internationally, the numbers weren’t so hot. A 32% drop in income for overseas parks hurt the segment’s bottom line.

After years of streaming struggles, Disney has finally found its groove. Profits are up, movies are crushing it, and the company’s guidance looks more optimistic than it has in a long time. But this rally might be short-lived if the streaming and park numbers don’t stay strong. We’re all pumped now, but let’s remember: Disney’s still 40% down from it's all-time high back in March 2021.

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Stock.News has positions in Disney.