Walt Disney (DIS.N) outperformed Wall Street in earnings on Wednesday, offsetting a drop in advertising income at television network ABC with increased attendance at its theme parks in Shanghai and Hong Kong.

In after-hours trading, the entertainment company’s shares surged 3% to $87.14, indicating investor confidence in CEO Bob Iger’s relentless cost-cutting, the company’s better-than-expected increases in streaming subscribers, and Iger’s statement that Disney had once again entered a “building” period.

By the end of 2023, the business intends to request from its board that a dividend be paid to shareholders again, according to interim Chief Financial Officer Kevin Lansberry.

Disney posted adjusted per-share earnings of 82 cents for the fiscal fourth quarter that ended on September 30, above an average estimate of 70 cents, according to LSEG data. The $21.2 billion in quarterly sales was about in line with forecasts. According to the firm, the addition of “Guardians of the Galaxy Vol. 3” and the original series “Star Wars: Ahsoka” increased approximately 7 million Disney+ streaming customers during the quarter. Disney+ and Disney+ Hotstar’s combined 150.2 million users are ahead of Visible Alpha’s estimated 147.4 million members.

As said in a release, “Our results this quarter reflect the significant progress we’ve made over the past year,” Iger claimed. “While we still have work to do, these efforts have allowed us to move beyond this fixing period and begin building our businesses again,” Disney claims that because of its proactive cost management, it is on target to realize a yearly savings of $7.5 billion.

Activist shareholder Nelson Peltz, whose Trian Fund Management is anticipated to pursue board seats, is again putting the century-old entertainment behemoth under strain. In January, Trian sought one board member; however, once Iger presented restructuring proposals to save $5.5 billion, the proxy war was called off a month later.

Trian didn’t immediately respond to Disney’s financial report. PP Foresight analyst Paolo Pescatore states that the company’s performance “clearly underlines a razor-sharp focus on efficiencies across the board while focusing on content.” “This is in stark contrast to other traditional rivals who lack the same scale as Disney in this new streaming-driven world.”

Warner Bros. Discovery’s (WBD.O.) stock fell 19% earlier on Wednesday after the firm warned that profitability for the remainder of the year might be negatively impacted by two strikes in Hollywood and a sluggish advertising market. After a 148-day work stoppage, film and television writers approved a new three-year deal in September. However, SAG-AFTRA actors have been on strike since July, disrupting the industry’s 2024 film schedule and depriving media firms of fresh content to market.

Paul Verna, an analyst at Insider Intelligence, stated that he “would caution against the narrative that Disney is an outlier.”

“This is only one quarter, and the disruptive effects of the actors’ strike, the economy, and the competitive landscape in the traditional media and streaming businesses all play differently across the major players,” Verna said.

Due to price hikes and increased ad income, Disney’s streaming services—including Hulu and ESPN+—narrowed their quarterly losses to $387 million from $1.47 billion a year earlier. Disney plans to profit from its streaming service by September 2024. According to Iger, the company plans to release a test version of a combined Hulu and Disney+ app in December, with a full launch in the spring.

Including its theme parks, resorts, cruise lines, and consumer goods, Disney’s recently renamed Experiences segment posted over $1.8 billion in operating profits in the quarter, up 31% from last year. Increased attendance at the Shanghai Disney, Hong Kong Disneyland, and Disneyland resorts, as well as the cruise industry’s growth, partially offset reduced performance at Walt Disney World in Florida.

Disney’s Entertainment division, which comprises its film studio, television networks, Disney+, and Hulu services, reported operational profitability of $236 million for the quarter, up from $608 million in losses the previous year.

The Disney-owned TV stations and the ABC network recorded a decrease in advertising income due to a decline in viewing. Compared to “Thor: Love and Thunder” from the previous year, the summer film “The Haunted Mansion” did not perform as well.

The company’s sports division recorded an operating income of $981 million, up 14% from last year. This division comprises Disney’s ESPN-branded television channels, the ESPN+ streaming service, and the Star-branded sports networks in India.

ESPN decided not to extend its deal with the Big Ten college football league, which resulted in decreased programming expenses. An increase in ESPN+ subscription income due to pricing increases and user growth also benefited the unit.

According to Iger, ESPN attracted its largest audience in the highly sought-after 18–49-year-old demographic and its best total viewing in four years. He noted that the firm is looking for partners as it prepares to move ESPN to streaming.

“We’ve engaged with several different entities,” Iger stated. “I can say that there’s significant interest out there.”