What happened

Wrapping up its fiscal 2019, Walt Disney (DIS -2.68%) reported its Q4 earnings last night, and the stock is up 4% as of 10:35 a.m. EST in response -- after shooting up more than 5% in trading earlier today.  

Disney crushed earnings estimates, reporting pro forma profits of $1.07 per share versus Wall Street's expected $0.95, and even eking out a small win on sales, with $19.1 billion in revenue trumping expectations for $19.04 billion.  

Woman at park wearing Minnie Mouse ears

Image source: Getty Images.

So what

CEO Robert Iger called the results "solid," despite the fact that actual GAAP profits were only $0.43 per share, down 72% year over year. (And pro forma results declined 28% year over year.)

Full-year earnings likewise slumped, falling 25% to $6.27 per share, but quarterly sales were up 34% and full-year sales grew 17% to $69.6 billion.

Quarter over quarter, the company's strongest sales gains came in the direct-to-consumer and international division, where revenue more than doubled, followed by entertainment (up 52%) and media networks (up 22%). Parks was the weakest performer, with sales rising only 8% -- but each and every division saw its revenue grow.

Now what

Free cash flow, however, declined year over year -- crashing an astounding 83% to just $1.7 billion (as calculated by S&P Global Market Intelligence; Disney's own calculation gives an even more depressing tally of $1.1 billion).

To me, this is the biggest concern about investing in Disney right now. If the stock's 22.6 price-to-earnings ratio isn't exactly cheap, but is at least within the realm of reality, its price-to-free-cash-flow ratio of more than 146 makes it look positively radioactive. Absent a big improvement in cash generation after Disney+ rolls out, this stock looks far too hot to handle.