DIS - Disney: DTC Is At It Again
2024-02-09 12:45:42 ET
Summary
- The Walt Disney Company's unexpected positive quarterly results, particularly in Direct-To-Consumer, or DTC, caused the stock to soar.
- The improvement in DTC is the largest in the company's history, leading to overall improvement in the entertainment division.
- Disney and Warner Bros. Discovery prioritize market share over profits first, and then later aim for cash flow and profits.
- Disney management presented a future vision that captured the market's attention.
- First quarter's free cash flow took a big jump due to the DTC improvement and the strikes. Some of that improvement should reverse in later quarters.
The Walt Disney Company ( DIS ) reported an unexpectedly good fiscal first quarter that surprised the market enough that the stock soared. Much of that surprise was concentrated in Direct-To-Consumer ((DTC)), as the company is facing a lot of issues. But nothing helps stock performance more than a positive (unexpected) comparison combined with what management is doing to provide more upside potential in the future. A currently positive earnings comparison often gives the rest of the story more credibility than it would have without the current comparison. With Bob Iger back at the helm, investors can expect the positive news to keep showing up as earnings one quarter at a time. He has been considered an expert at "keeping things going in the right direction."
DTC
Much of what happened would not have been possible without the DTC. Here is what management provided in the quarterly press release ....
Disney: DTC Is At It Again