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Disney (NYSE:DIS) tops Q2 estimates and ups its FY25 outlook, driven by subscriber growth and strong segment performances.
In the quarter ended April 5, Disney delivered non-GAAP EPS of $1.45, beating consensus by $0.24, while revenue of $23.6 billion rose 6.8% year-over-year and surpassed forecasts by $470 million.
Direct-to-Consumer operating income jumped $289 million to $336 million as Disney+ and Hulu added 2.5 million net subscribers, bringing their combined total to 180.7 million1.4 million of which joined Disney+ in the quarter. Linear Networks operating income grew 2%, even against a tough $89 million Star India comparison last year.
Looking ahead, Disney initiated Q3 guidance calling for modest subscriber gains in its direct-to-consumer business, while full-year fiscal 2025 adjusted EPS is now expected at $5.75a 16% increase over FY24 and well above the prior high-single-digit growth target and the $5.44 Wall Street consensus.
The company also lifted its cash-from-operations forecast by $2 billion to $17 billion, reflecting the deferral of tax payments. Segment outlooks point to double-digit operating income growth in Entertainment, 18% in Sports, and 6%8% in Experiences, though Disney Cruise Line will incur roughly $200 million of pre-opening expenses over the back half of the year. An equity loss of about $300 million from the India JVdriven by purchase-accounting amortizationwill partially offset these gains.
Why it matters: Disney's ability to combine robust subscriber additions with disciplined cost managementand now clearer full-year visibilityreinforces confidence in its pivot toward streaming profitability and diversified growth drivers.
Investors will watch Q3 subscription trends, box-office releases and the December launch of ESPN+ in new markets when Disney reports next quarter, likely in early August.As of May 7, 2025, The Walt Disney Co. (NYSE:DIS) is trading below its GF Value of $110.43, placing it in the modestly undervalued category per GuruFocus.
The stock has struggled to sustain momentum, dipping well below the estimated intrinsic value. Despite recent volatility, the long-term GF Value trend projects gradual growth, implying potential upside if fundamentals stabilize. This discount may offer investors an opportunity if Disney delivers consistent performance ahead.
This article first appeared on GuruFocus.