The company, which had previously announced an effort to reduce costs by $5.5 billion this year, now expects to save an additional $2 billion, CEO Bob Iger said on an earnings call Wednesday. Investors welcomed the cuts, sending Disney’s stock up 7% on Thursday. Keeping costs in line will also likely play a pivotal role in girding the company for more skirmishes with Peltz, who has previously criticized Disney for its spending habits. He is said to be considering a renewed push for at least one Disney board seat and was waiting for the company’s latest earnings to decide, according to CNBC. 

The extra cost savings helped raise Disney’s quarterly operating profit by almost $1.4 billion from the same period a year before, to a total of nearly $3 billion. 

Disney’s revenues for the quarter were $21.2 billion, in line with analyst expectations. Most notably, though, the company said it expects to end the year with $5 billion in free cash flow, while projecting $8 billion for 2024, its highest level since 2019. Part of the added cash flow will fund a dividend by the end of the year, which among the reasons Peltz backed off his initial push for a board seat. 

Disney plans to cut about $4.5 billion in spending on content, acknowledging that its movie studio had prioritized quantity over quality. Iger said he was devoting “considerably more of my time” to improving the returns from Disney’s movies. “I’m mindful of the fact that our performance from a quality perspective wasn’t really up to the standards that we set for ourselves,” he said on the call. Some of its recent releases, like Little Mermaid and Indiana Jones and the Dial of Destiny, performed well at the box office but received tepid reviews. 

Many of the cuts come as Disney tries to make its streaming business profitable, an elusive target for many media conglomerates. Disney reduced its fourth-quarter losses on streaming, which include Disney+ and a majority stake in Hulu, by about $1 billion compared to the same period a year earlier. Overall that segment lost $420 million in the September quarter. Disney+ had 112 million total subscribers, beating analyst estimates by about four million after signing up seven million new users in the quarter. Much of that growth was from the launch of Disney+’s new ad-supported tier, which added roughly two million new subscribers. Disney said it expected its streaming service to be profitable by the end of 2024, but declined to provide more specifics. 

Disney’s insistence on making its streaming business profitable comes as its linear television segment continues to decline along with the rest of the industry as consumers cancel their cable subscriptions. In the latest quarter, revenue from Disney’s television channels, including ABC, National Geographic, and FX, dropped 9% compared to last year. Meanwhile, operating income was flat, mostly because the revenue declines were offset by cuts in marketing, programming, and production costs, according to outgoing interim chief financial officer Kevin Lansberry. 

Earlier this year, Disney’s TV business became a flashpoint for broader market changes when cable company Charter Communications decided to stop airing Disney-owned channels. Charter wanted Disney to reduce the fees it charged to broadcast its channels and provide Charter customers with discounts to Disney+, Hulu, and ESPN+. The dispute was eventually settled in September when Disney agreed to give Charter customers access to its streams, and Charter paid an undisclosed sum. The fight reduced Disney’s domestic affiliate fees by 1.5%. Disney downplayed questions of whether the deal would have lasting impacts. “It doesn’t really change things much in terms of our strategy because when you look at the deal, it actually ended up reflecting exactly what our strategic priorities are, which is streaming,” Iger said. 

In addition to its Charter fight, Disney is also embroiled in a boardroom fight with Peltz. Earlier this year, Peltz bought up a large Disney stake and demanded a board seat, accusing the company of profligate spending. He eventually backed down when Iger rolled out his cost cutting plan in February. Since then, Peltz has increased his Disney stake to 30 million shares, valued around $2.5 billion and is pushing for multiple board seats. Strengthening Peltz’s case this time around is his alliance with Ike Perlmutter, the former chairman of Marvel Entertainment and Disney’s largest independent shareholder. Perlmutter, who was ousted from his job in March, has given Peltz sole voting power over his Disney shares, the Wall Street Journal reported. 

Iger and Disney did not specifically address Peltz or his maneuvering during the earnings call.