Disney (DIS), which has topped profit estimates, is seeking an extra $2 billion in cost savings

Walt Disney Co. stocks jumped after it reported a higher-than-expected net profit and pledged to cut another $2 billion in expenses.

Disney announced on Wednesday that the fiscal fourth-quarter earnings increased to 82 cents per share, excluding certain items. This was higher than analysts’ projection of 69 cents. Revenue was in line with analyst expectations.

Bob Iger, Chief Executive Officer of Disney, said in a conference call with investors that the plans to cut costs will help Disney transition from an “era of fixing” to a “new era of building”. Disney plans to pay a dividend again by the end of 2023 for the first since the pandemic.

Nelson Peltz is seeking to represent the company on the board of directors once more. He has raised two major issues: the runaway costs and the lack of dividend.

Peltz’s Trian Fund Management, which controls an approximate $2.5 billion stake of Disney, is planning to run for several board seats. Iger, the CEO who took over last November following the ouster Bob Chapek’s successor, had committed to cut more than $5 billion in annual expenses. He has already cut 8,000 jobs.

On Thursday, shares in New York closed at $90.34, a 6.9% increase. This is the largest gain in nearly three years.

The company stated that the additional budget cuts announced on Wednesday will not result in a second round of widespread job loss.

Disney’s flagship theme parks have delivered the largest profit boost in its fourth quarter. Earnings grew 31%, to $1.76 Billion, for the period ending September 30. The division’s revenue, which includes consumer goods, increased 12% to $8.16 Billion, with a 55% increase in international sales.

Disney’s streaming businesses, including ESPN+, posted losses of $387 million, which was less than Wall Street expected. The company expects the business to become profitable in the fourth quarter, which is just beginning.

Disney+ subscribers worldwide surpassed estimates of 147.4 millions and returned to growth. Disney+ subscribers, including Hotstar subscribers internationally, increased by 7%, to 112.6 millions.

Disney’s content budget is expected to drop to $25 billion this fiscal year. This is 17% less than two years ago. The company has been in discussions to sell some of its programming to Netflix Inc. again, but this won’t include core brand like Marvel and Star Wars.

Peltz argues that Disney’s cost are too high, and that the board should be held accountable for areas like succession planning.

Ike Perlmutter – the former chairman and CEO of Marvel Entertainment, who Iger fired earlier this year for lobbying Peltz’s inclusion on Disney’s board – has pledged shares to Peltz. Peltz backed off his initial bid for Disney board representation when Iger announced the first round of cost-cutting measures.

Iger, in addition to cutting expenses, is also evaluating ways to reposition Disney, as traditional TV networks such as ABC, National Geographic, and FX continue to lose viewers.

Warner Bros. shares rose on Wednesday morning. Discovery Inc.’s shares fell the most ever recorded after the company announced a decline in network advertising. The company also said that the market could remain challenging next year.

Disney’s CEO said he was open to selling traditional TV networks. He also suggested that he might seek a joint venture or a minor investor with a tech firm to speed up the ESPN Sports Network’s transition to streaming.

Iger stated in an interview with CNBC on Wednesday that the main ESPN Channel would be available online as a streaming service no later than 2025.

For the first time management has separated the results of ESPN. They say that revenue for their sports networks was unchanged at $3.91 billion during the fourth quarter while earnings increased 14% to $981 millions. Disney credited lower programming costs and higher subscription revenues.

The company’s entertainment network earnings were unchanged at $805 millions, but revenue fell 9.1% to $2.63 Billion.

Disney also buys a third stake in Hulu, the streaming service of Comcast Corp.. The deal is worth at least $8.61 Billion. Iger announced that the company would launch a beta version next month of a single application integrating Disney+ and Hulu. The official rollout will take place in March.

Hugh Johnston was named as the new chief financial officer of PepsiCo, Inc., this week. Johnston, a finance and operations executive with extensive experience, led Pepsi’s Peltz campaign during the 2010s.