Disney hails ‘momentum’ as Deadpool and Inside Out 2 boost box office returns
Walt Disney is trying to roll the credits on its years-long battle to reassure Wall Street and Hollywood that it can dominate a new era of entertainment.
The Magic Kingdom, which rarely issues guidance on future profits, told shareholders it expects an acceleration over the coming years – with “double-digit percentage growth” in adjusted earnings in 2026 and 2027.
Shares in Disney rallied more than 9% during pre-market trading on Wednesday after it beat analysts’ expectations in the fourth quarter, with sales rising 6% to $22.6bn. It reported net income of $564m, down from $694m a year ago.
The company’s stock has stabilized in 2024, after losing almost two-thirds of its value in less than three years, amid lackluster box office returns and an expensive bet on streaming.
Two key blockbuster releases – Inside Out 2 and Deadpool & Wolverine – helped Disney recover at the box office this summer. With Moana 2 out later this month, Disney’s CEO, Bob Iger, said the company was “encouraged by this momentum” after a challenging few years.
Iger, who returned to the company from retirement in November 2022, undertook aggressive cost-cutting and worked to revitalize the company’s film and TV units after a period of misfires.
Disney last month said it would name a new CEO in early 2026. The new boss will replace Iger, who returned to the company after the board fired Bob Chapek, his handpicked successor.
Disney’s direct-to-consumer division – home to its Disney+ and Hulu platforms – gathered steam in the latest quarter, as its costly bet on streaming starts to pay off. The unit generated an operating profit of $253m in the three months to September 28, from a loss of $420m in the same period of 2023.
Disney’s traditional TV networks remain under pressure, however, with profits falling, and its theme parks and resorts arm – a key engine of the business – endured lower footfall and spending at international sites.
“This was a pivotal and successful year for the Walt Disney Company, and thanks to the significant progress we’ve made, we have emerged from a period of considerable challenges and disruption well positioned for growth and optimistic about our future,” said Iger. “Our solid performance in the fiscal fourth quarter reflected the success of our strategic efforts to improve quality, innovation, efficiency, and value creation.”
Reuters contributed reporting