Fiscal 2019 was a year of transition for Walt Disney (NYSE:DIS). For one thing, Disney completed its acquisition of Twenty-First Century Fox around the middle of the fiscal year. The company also spent much of the year preparing for a shift in its business model toward a greater emphasis on direct-to-consumer entertainment -- particularly the Disney+ streaming service, which will launch in just a few days.

These two developments have weighed on results in recent quarters. But the House of Mouse benefited from a strong film slate over the summer, helping it to post solid financial results in the final quarter of fiscal 2019.

Earnings per share fall, but still beat expectations

Disney generated revenue of $19.1 billion last quarter -- up from $14.3 billion a year earlier -- mainly due to the Fox acquisition. Total segment operating income increased 5% to $3.4 billion, despite the company now booking Hulu's entire loss in its financial results after taking full control of the streaming service earlier this year.

Outside of its segment results, Disney is experiencing severe earnings pressure, mainly from amortization expenses related to buying Fox and Hulu. Higher interest expense (from the debt it issued to fund the Fox deal), higher corporate overhead costs, and other one-time items also hurt earnings. Lastly, Disney's share count increased in conjunction with the Fox acquisition.

As a result, EPS plunged 72% to $0.43 last quarter. On an adjusted basis -- excluding various one-time items -- EPS fell 28% year over year: from $1.48 to $1.07. That easily beat the average analyst estimate of $0.95. CFO Christine McCarthy also estimated that the dilution from buying Fox and Hulu reduced EPS by about $0.47. In other words, on a like-for-like basis, earnings grew for the core Disney business.

A scene from Disney's live-action version of The Lion King

A strong film slate, including The Lion King, helped boost Disney's results last quarter. Image source: The Walt Disney Company.

Disney Studios: the strong point, as expected

Disney's studio entertainment segment was far and away the biggest driver of organic growth last quarter. The segment's revenue jumped 52% year over year to $3.3 billion, while operating income soared 79% to $1.1 billion.

Management attributed most of the profit growth to strong theatrical results. Disney's main release of the quarter, The Lion King, was a huge success, grossing more than $500 million domestically and more than $1.6 billion worldwide. Disney also benefited from the solid carryover performance of Toy Story 4 and Aladdin, which were released late in the prior quarter. Unfortunately, the Fox films it inherited were all busts last quarter.

Importantly, Disney also stabilized its home entertainment performance last quarter after facing severe declines earlier in fiscal 2019. It was helped in this respect by the home video releases of Avengers: Endgame  and Aladdin during the period.

Tailwinds will continue into fiscal 2020

Disney's first theatrical release of fiscal 2020 -- Maleficent: Mistress of Evil -- has been a giant bust. But it has two more releases coming up later in the quarter: Frozen 2 and Star Wars: The Rise of Skywalker. Both franchises have huge followings, so these films are likely to deliver strong performances at the box office. Disney will also benefit from the home video releases of Toy Story 4 and The Lion King this quarter. As a result, the studio entertainment segment is likely to post strong profit growth in Q1, particularly because it faces an extremely easy year-over-year comparison.

The strong end-of-year film slate also bodes well for the second and third quarters, which will benefit from carryover performance of both upcoming films, followed by their home video releases. This should help offset the fact that Disney's 2020 theatrical release schedule has fewer likely blockbusters than its epic 2019 film slate. The upcoming Frozen and Star Wars films could also boost merchandise sales throughout fiscal 2020.

Disney will need every bit of profit it can wring out of its film studio and related business lines in the upcoming year. In addition to continued earnings pressure from the Fox acquisition and taking full control of Hulu, losses from Disney+ are about to ramp up. Luckily, it looks like the company can count on strong performance from these core businesses over the next few quarters to help fund the investments that will drive its long-term growth.