Disney ETFs in Focus Post Q1 Earnings Beat

On Feb. 5, the Walt Disney Company DIS reported first-quarter fiscal 2025 adjusted earnings of $1.76 per share, which beat the Zacks Consensus Estimate by 22.2% and increased 44.3% year over year. Revenues rose 4.8% year over year to $24.69 billion and beat the consensus mark by 0.1%.

Disney has a Growth Score of A, along with a Zacks Rank #2 (Buy), signaling strong growth potential. This indicates that investors looking for growth should invest in Disney shares.

Disney's Segment Breakdown

Media and Entertainment Distribution revenues, which constitute about 44% of revenues, increased 8.9% year over year to $10.87 billion. Segmental operating income increased by 30.5% year over year, reaching $5.06 billion from $$3.9 million. Costs & expenses remained flat year over year at $20.61 billion in the reported quarter.

Parks, Experiences and Products revenues, constituting 38.1% of total revenues, rose 3.1% year over year to $9.41 billion. International revenues increased 11.5% year over year to $1.64 billion in the reported quarter. The segment’s operating income was $3.11 billion, up 0.2% year over year.

Revenues from Linear Networks declined 6.6% year over year to $2.61 billion and operating income fell 11.2% to $1.09 billion. Revenues from Direct-to-Consumer increased 9.5% year over year to $6.07 billion.

Content Sales/Licensing and Other revenues grew 33.8% year over year to $2.18 billion. The segment’s operating income was $312 million against an operating loss of $224 million reported in the year-ago quarter, driven by higher theatrical distribution results reflecting the strong performance of Moana 2.

Subscriber Information

Disney+, as of Dec. 28, 2024, had 124.6 million paid subscribers compared with 122.7 million as of Sept. 28, 2024. Domestic Disney+ average monthly revenue per paid subscriber decreased from $7.7 to $7.99 due to increases in prices, whereas, International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber increased from $6.78 to $7.19 due to increases in prices and higher advertising revenues.

Hulu SVOD Only average monthly revenue per paid subscriber was comparable to the prior sequential quarter as lower advertising revenues were offset by increases in prices and a higher mix of subscribers to multi-product offerings.

Guidance

For fiscal 2025, Disney expects high single-digit adjusted EPS growth compared to fiscal 2024. In Entertainment, the company expects double-digit percentage segment operating income growth compared to fiscal 2024.

ETFs in Focus

Shares of the media giant fell nearly 3.6% on Feb. 5 after it reported first-quarter results. However, shares of the company have rebounded since then, rising 2.7% as of Feb. 6.

The earnings outcome could significantly influence ETFs with investments in this major media player. Below, we have put the spotlight on ETFs that have exposure to Disney.

AdvisorShares Gerber Kawasaki ETF (GK)

AdvisorShares Gerber Kawasaki ETF has an exposure of 4.89% in DIS. The fund has gained 1.45% over the past three months and 20.23% over the past year.

Invesco S&P 500 Equal Weight Communication Services ETF (RSPC)

Invesco S&P 500 Equal Weight Communication Services ETF has an exposure of 4.4% in DIS. The fund has gained 4.91% over the past three months and 18.20% over the past year.

Communication Services Select Sector SPDR Fund (XLC)

Communication Services Select Sector SPDR Fund has an exposure of 4.31% in DIS. The fund has gained 7.31% over the past three months and 34.65% over the past year.

Natixis Vaughan Nelson Select ETF (VNSE)

Natixis Vaughan Nelson Select ETF has an exposure of 4.3% in DIS. The fund has lost 0.20% over the past three months but gained 10.22% over the past year.

iShares Global Comm Services ETF (IXP)

iShares Global Comm Services ETF has an exposure of 4.23% in DIS. The fund has gained 3.61% over the past three months and 31.31% over the past year.

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