Disney reported stronger-than-expected fiscal 2024 first-quarter earnings after the closing bell Wednesday as cost reductions across its many businesses boosted margins despite flat revenue. A strong profit forecast for the rest of fiscal 2024 and an upsized capital return program helped send shares up more than 6% higher in after-hours trading. Revenue was about flat year over year $23.55 billion, missing expectations of $23.64 billion, according to the consensus estimate compiled by LSEG. Adjusted earnings-per-share (EPS) increased 23% to $1.22, beating the LSEG consensus forecast of 99 cents. DIS YTD mountain Disney YTD The after-hours stock gain was a step in the right direction and will be a nice addition to Disney’s nearly 10% year-to-date gain as of Wednesday’s close. Bottom line Well, you must admit this new Disney under CEO Bob Iger is starting to pay dividends. And we are not just talking about cash dividends. Iger and his new CFO Hugh Johnston are running a tighter ship , as evidenced by the over $500 million in Selling, General, and Administrative (SG & A) and other expense savings in the quarter. This embrace of a more cost-efficient culture offset a TV business that continued to face structural challenges and pushed Experience margins to record highs as DTC losses narrowed. This turnaround has not been easy, and it’s far from over, but you can see how the fundamentals have improved. Profitability and free cash flow are increasing, allowing management to reinvest in growth and reward shareholders. Restoring box office success still needs to happen, but the slate of new releases through the end of 2026 does have a ton of potential. While we are encouraged by the progress happening at Disney, and the stock deserves to be rewarded on Thursday, we still have some questions about what the best direction of the future of the business is. This is why we want to see Disney board have more “skin in the game,” meaning increased stock ownership among its…
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