Disney's Bob Iger is back on top

• Bob Iger announced a strong start to the year for Disney, beating Wall Street's expectations.
• The returning CEO had faced challenges during his first year back at the company.

Bob Iger's return to Disney is starting to look a little more like a victory lap.

After a challenging first year back at the House of Mouse, things are now looking rosier, with CEO Iger pairing a strong earnings report with a slate of announcements, including partnerships with Epic Games and Taylor Swift and a forthcoming sports streaming platform.

The robust results should give the notably confident Iger ammunition in his ongoing battle with activist shareholders, including Nelson Peltz, who have criticized Disney for its lagging stock performance and for ex-leader Bob Chapek's short and rocky tenure before Iger returned in late 2022. Peltz's Trian Fund Management and Blackwells Capital have proposed board candidates, who Disney has countered with its own proposed slate, supported by influential shareholder ValueAct Capital.

"We have entered a new era," Iger said as he kicked off his earnings call, a nod to the news that Swift's "Eras Tour" film will be exclusively available on Disney+.

The market seemed to agree, with Disney shares jumping about 7% in after-hours trading.

The data are on Iger's side. Disney's fiscal first-quarter earnings per share beat expectations and it said its full-year EPS will rise at least 20% from 2023.

It also narrowed its streaming losses to $216 million from $1.05 billion in the prior quarter and expects the unit to be profitable by the end of 2024.

"Disney's third strong quarter in a row will bolster Iger as he continues to grapple with getting the streaming business to profitability, and shrinking the streaming losses was a big step in that direction that should help pull the stock out of its slump," said Paul Verna, an analyst at Insider Intelligence.

"There are still big battles ahead for Disney this year and beyond, but today's results will no doubt bring a sigh of relief to the company's leaders and shareholders," he said.

Disney to invest in "Fortnite" maker, announces ESPN strategy

Boosting the results were a slew of announcements reminiscent of Iger's bold moves during his first tenure as CEO.

Disney will invest $1.5 billion into Epic Games, the company behind "Fortnite." The benefits of the partnership, he said, will be twofold: exposing Gen Z and Gen Alpha — age groups that entertainment companies have struggled to reach through traditional channels — to Disney's slate of IP, and revenue-driving through in-game purchases. It's a move geared to showing Wall Street that Disney is paying attention to gaming and younger demographics.

Iger also unveiled his strategy and timeline for bringing Disney's flagship sports network ESPN into the streaming era.

The company will launch a stand-alone streaming service with ESPN and its sister networks in the fall of 2025, something Iger called "inevitable." The platform will likely integrate betting and fantasy, merchandise, sports stats, and customization, he said on Wednesday's earnings call. Customers will also be able to bundle the offering with Disney+ and Hulu.

This new service is separate from the super sports streamer coming this fall, which the company announced on Tuesday, which will combine ESPN and ABC's sports programming with Fox and Warner Bros. Discovery's. Iger described the joint venture as a multi-channel play to attract new customers who may think the classic pay-TV bundle is too expensive. The companies haven't yet announced the price for their streamer.

Still, Wall Street is curious how quickly these new efforts could cannibalize and replace Disney's existing linear TV business that relies on the cable bundle — and how Disney will balance investment and priorities between the two sports streamers.

Even if there's consumer demand, the JV faces several hurdles, from challenges brought by existing distributors to antitrust opposition, LightShed Partners wrote in a note published ahead of Disney's earnings release.

But Iger had been under pressure from investors to better monetize and define the future of its sports network, which has been hit by cord-cutting and rising sports-rights costs. Some had even called for Disney to spin off the ESPN brand. Challenges aside, the new sports streaming strategy is a big step forward for Iger and Disney.

"Moana" and Taylor Swift may be Disney's 2024 MVPs

Iger also announced that the concert movie "Taylor Swift: The Eras Tour" will exclusively stream on Disney+. So far, the film of the record-breaking tour has garnered more than $260 million at the global box office.

And regarding other films and TV, Iger took a much sunnier tone than during November's earnings call when he acknowledged the drop in quality of Disney films.

"I feel great about where we are with the studio," he said. "In our zeal to greatly increase volume, partially tied to wanting to chase more global subs for our streaming platform, some of our studios lost a little focus."

He described a strategy that included reducing output, including from Marvel; killing films and series that didn't meet a quality benchmark; and doubling down on a pipeline of movies the studio believes will succeed. He pointed to an upcoming theatrical film sequel to "Moana," which should give the box office a boost after last year's lackluster results.

To be sure, there will still be detractors, but Iger didn't seem concerned, particularly given the fact that the company will dole out a dividend of $0.45 per share in July — a 50% increase from the one paid out last month.

Peltz's Trian didn't sound immediately impressed. "It's déjà vu all over again. We saw this movie last year and we didn't like the ending," Trian said in a statement.

But Iger told CNBC, "the last thing that we need right now is to be distracted in terms of our time, our energy, by an activist or activists that, frankly, have a completely different agenda and don't understand our company, its assets, even the essence of the Disney brand."

And when it came to another known Iger critic, Elon Musk, who earlier this week said he would finance "Mandalorian" actor Gina Carano's lawsuit against Disney, Iger's feathers also didn't seem ruffled.

"None," he said simply when asked for a comment on the Tesla chief.

Looks like Iger's got his swagger back.