Walt Disney Company's new storybook: Ignoring the elephant in the room

Noticed, Walt Disney Company boldly released a three-year forecast, detailing everything from extensive profit growth to profit forecasts for streaming TV services. Despite this outlook helping its market value increase by 10%, there are still some loopholes. The financial report released on Thursday showed that Walt Disney Company's Q4 revenue increased to $22.6 billion, a 6% year-on-year increase, with net profit soaring to $4.6 billion, a significant increase from the same period last year. Adjusted earnings per share were $1.14, higher than Wall Street's forecast of $1.10, and revenue was slightly higher than expected. In addition, Walt Disney Company's free cash flow reached $4 billion, operating profit increased by 23% year-on-year, reaching nearly $3.7 billion. Furthermore, Walt Disney Company announced pleasing progress in several areas. In the last quarter, the operating profit of Walt Disney Company+, Hulu and ESPN+ changed from a loss of $387 million in the same period last year to a profit of $321 million. In addition, the number of subscribers to its main products increased by 3% to reach 174 million. The company regained some movie profits with Marvel's "Deadpool and Wolverine" and Pixar's "Inside Out 2", helping its profits grow by 79%. This momentum has given Walt Disney Company Chairman Bob Iger confidence to make a series of financial predictions. Most notably, Walt Disney Company has set a target for its Direct-to-Consumer segment to achieve a 10% operating profit margin by September 2026, something activist investor Nelson Peltz criticized the company for not outlining in earlier campaigns. Other newly announced plans include high single-digit earnings growth next year, higher than the analysts' previous forecast of 4%. Iger's optimistic outlook overlooks serious industry issues and turbulence. For example, in the fourth quarter ending September 28, Walt Disney Company's broadcasting division (including ABC, FXX, and Walt Disney Company channels) saw a 38% drop in operating revenue to $500 million. Meanwhile, some competitors are preparing to divest. Comcast Corporation Class A is considering a plan to split off a range of channels including Bravo and MSNBC. The impact of other upcoming events will also be difficult to assess. NBCUniversal will open a new large theme park in Orlando, intensifying competition with Walt Disney Company. Faced with so many options and rising prices, consumers are also showing fatigue towards streaming services. Consolidation is inevitable. As Amazon.com, Inc. and other companies increasingly enter the realm of ESPN, the fate of expensive and valuable sports programming is also in a state of flux. However, perhaps the biggest question is whether the latest adjusted vision of this magical kingdom will continue after Iger's planned departure in December 2026. Previously, he had extended his tenure multiple times, until coming back from retirement. Now, he is trying to leave his mark in a different way, and the story of Walt Disney Company will soon be told by someone else.