Disney (NYSE:DIS) reported strong fiscal fourth-quarter earnings, surpassing expectations. The company also increased its annual cost-cutting target to $7.5 billion, up from the previous $5.5 billion set in February.

One notable success was Disney’s streaming business, which outperformed expectations with nearly 7 million net additions, compared to consensus estimates of 2.68 million. Streaming losses narrowed to $387 million, down from a loss of $1.41 billion in the previous year, after Disney raised streaming prices for Disney+ and Hulu plans by more than 20% this year.

Analysts had anticipated direct-to-consumer losses to reach $454 million for the quarter. Disney had previously reported losses of $512 million in Q3, a $659 million loss in Q2, and a $1.1 billion loss in Q1.

Disney’s latest results coincide with the appointment of its new CFO and the commitment to purchase Comcast’s 33% stake in Hulu. Following the results, Disney’s shares surged more than 2% in after-hours trading.

Disney remains optimistic about the profitability of its combined streaming businesses by Q4 of FY24, though progress may not be entirely linear.

Adjusted earnings came in at $0.82 per share, exceeding expectations of $0.69 per share and more than double the prior-year period’s earnings per share of $0.30. While revenue slightly missed estimates at $21.24 billion (compared to an estimated $21.43 billion), it still marked a 5% increase from the prior-year quarter’s $20.15 billion.

The results are the first since Disney reorganized into three core business segments: Disney Entertainment (including media and streaming); Experiences (encompassing the parks business); and Sports (covering ESPN networks and ESPN+).

Here’s how each of these segments performed in the quarter:

Entertainment revenue: $9.52 billion versus an expected $9.77 billion
Sports revenue: $3.91 billion versus an expected $3.89 billion
Experiences revenue: $8.16 billion versus an expected $8.20 billion

Disney CEO Bob Iger expressed the company’s significant progress in the past year and their transition from a period of fixing to building their businesses. He outlined four key opportunities for future success: achieving profitability in their streaming business, building ESPN as a digital sports platform, improving their film studios, and enhancing growth in their parks and experiences business.

Disney’s stock has faced challenges, down approximately 3% since the beginning of the year and reaching a nine-year low recently. Activist investor Nelson Peltz has also targeted the media giant. Kevin Mayer, former head of Disney’s streaming, noted that Disney is addressing several uncertainties and that a strategic vision articulated by CEO Bob Iger could address most of the company’s challenges.

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