"Who's the leader of the club that's made for you and me," is the opening line of Walt Disney's (NYSE: DIS)Mickey Mouse March that used to open the iconic The Mickey Mouse Club show. In a surprising twist, when it comes to the 30 components of the Dow Jones Industrial Average the leader this year happens to be Disney itself.

Disney's 29% gain through the May 6 close makes it the top gainer of the Dow 30. Shares of the media giant may be volatile after it posted mixed financial results on Tuesday morning, but let's go over a few reasons why Disney is leading the way after being a laggard in the Dow in each of the three previous years.

1. The bottom-line beats keep coming

Disney reported a small loss in the fiscal second quarter covering the three months ending in March. The quarter's bottom line was held back by a goodwill impairment charge topping $2 billion, covering primarily restructuring charges related to the shift of its Star India business into a new joint venture. Back out the sizable one-time charge, and Disney's adjusted earnings soared 30% to $1.21 per share.

Analysts were holding out for adjusted net income of $1.10 a share, an 18% increase. Disney has consistently exceeded Wall Street profit targets over the past year, clocking in with double-digit percentage beats in the last three quarters.

Data source: Yahoo! Finance. EPS = earnings per share.

Disney has historically shied away from offering guidance, but it's making an exception as the turnaround here shifts to a bottom-line story. Disney now sees adjusted earnings per share rising 25% this fiscal year.

2. It can overcome near-term weakness in revenue

The shares did open lower on Tuesday despite the earnings beat. Two factors weighing on the stock's initial retreat are the miss on the top line and Disney warning that the current quarter will be seasonally sluggish before the business bouncing back in the fiscal fourth quarter. A 10% increase in its theme parks-helmed experiences segment was largely offset by a 2% increase in sports and a 5% decline for the rest of its entertainment business.

There's more color if you zoom into the numbers. The 5% decline for its entertainment segment doesn't mean that the shift to digital delivery is a losing strategy. There was a 13% increase for Disney+ and the rest of its direct-to-consumer streaming platforms. This is stacked against an 8% decline for its now substantially smaller linear networks business. The real driver of the 5% segment decline is the 40% plunge in its content sales and licensing business that consists primarily of its movie studio and theatrical releases. Disney was quiet at the box office this time around, but that's about to change with a busy slate of promising multiplex features coming out in the coming months. Limit the segment to just the gain in direct-to-consumer and the slide in linear networks and revenue would be up 5% instead of down 5% for the quarter.

During Tuesday's earnings call, CEO Bob Iger emphasized again that Disney will be scaling back on its theatrical releases to focus on quality over quantity, particularly when it comes to Marvel and some of its other properties. Fewer films may weigh on the top line, but in the long run getting back to the studio's winning ways feeds the pipeline of its ecosystem of consumer products, theme park attractions, and related content ventures.

Image source: Disney.

3. Disney has had a great start to 2024

The bounce through the first four-plus months of this year isn't just a dead-Figaro bounce, and by Figaro I mean Pinocchio's tuxedo cat. Disney has earned its upticks by making all of the right moves. It's not just two quarters announced so far this calendar with double-digit percentage beats.

Disney has come through with a dividend hike, its first share buyback authorization in six years, and improving optimism for the entertainment stock. The media giant isn't firing on all cylinders. Disney+ subscribers declined internationally and average revenue per user declined for domestic users. With ESPN about to pay a whole lot more for NBA rights starting in the fall of next year it will need to find ways to improve the monetization of its sports programming. However, Iger's focus on improving costs and turning its content creation around is the right near-term emphasis before shifting to succession plans and long-term opportunities.

With Disney now eyeing an adjusted profit of $4.70 a share this fiscal year, the stock opened on Tuesday at less than 23 times this fiscal year's earnings guidance. It's a fair price for a turnaround story that should only get better from here.

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Rick Munarriz has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy.