Disney (NYSE:DIS): Strongest Q1 Results from the Media Group

Wrapping up Q1 earnings, we look at the numbers and key takeaways for the media stocks, including Disney (NYSE:DIS) and its peers.

The advent of the internet changed how shows, films, music, and overall information flow. As a result, many media companies now face secular headwinds as attention shifts online. Some have made concerted efforts to adapt by introducing digital subscriptions, podcasts, and streaming platforms. Time will tell if their strategies succeed and which companies will emerge as the long-term winners.

The 7 media stocks we track reported a satisfactory Q1. As a group, revenues missed analysts’ consensus estimates by 5.3%.

In light of this news, share prices of the companies have held steady as they are up 3% on average since the latest earnings results.

Best Q1: Disney (NYSE:DIS)

Founded by brothers Walt and Roy, Disney (NYSE:DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.

Disney reported revenues of $23.62 billion, up 7% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.

“Our outstanding performance this quarter—with adjusted EPS(1) up 20% from the prior year driven by our Entertainment and Experiences businesses—underscores our continued success building for growth and executing across our strategic priorities,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company.

Disney scored the biggest analyst estimates beat of the whole group. The stock is up 20.6% since reporting and currently trades at $111.04.

Is now the time to buy Disney? Access our full analysis of the earnings results here, it’s free.

News Corp (NASDAQ:NWSA)

Established in 2013 after a restructuring, News Corp (NASDAQ:NWSA) is a multinational conglomerate known for its news publishing, broadcasting, digital media, and book publishing.

News Corp reported revenues of $2.01 billion, flat year on year, outperforming analysts’ expectations by 0.8%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.5% since reporting. It currently trades at $28.06.

Is now the time to buy News Corp? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Warner Music Group (NASDAQ:WMG)

Launching the careers of legendary artists like Frank Sinatra, Warner Music Group (NASDAQ:WMG) is a music company managing a diverse portfolio of artists, recordings, and music publishing services worldwide.

Warner Music Group reported revenues of $1.48 billion, flat year on year, falling short of analysts’ expectations by 2.2%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 9.1% since the results and currently trades at $27.35.

Read our full analysis of Warner Music Group’s results here.

Scholastic (NASDAQ:SCHL)

Creator of the legendary Scholastic Book Fair, Scholastic (NASDAQ:SCHL) is an international company specializing in children's publishing, education, and media services.

Scholastic reported revenues of $335.4 million, up 3.6% year on year. This print lagged analysts' expectations by 3.5%. Taking a step back, it was a mixed quarter as it also recorded an impressive beat of analysts’ EPS estimates but full-year EBITDA guidance missing analysts’ expectations.

The stock is down 7.1% since reporting and currently trades at $17.44.

Read our full, actionable report on Scholastic here, it’s free.

Warner Bros. Discovery (NASDAQ:WBD)

Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.

Warner Bros. Discovery reported revenues of $8.98 billion, down 9.8% year on year. This number missed analysts’ expectations by 6%. It was a slower quarter as it also logged a significant miss of analysts’ adjusted operating income estimates and a miss of analysts’ Advertising revenue estimates.

Warner Bros. Discovery had the slowest revenue growth among its peers. The stock is up 4.8% since reporting and currently trades at $9.

Read our full, actionable report on Warner Bros. Discovery here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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