What's going on?

Disney�s results earlier this week showed that the firm�s getting a thorough spruce up.

What does this mean?

Activist investors had been circling Disney, but returning CEO Bob Iger blew a pretty loud raspberry at them this week. Iger announced 7,000 job cuts and revealed plans to slash expenses by $5.5 billion � sending a clear message that he doesn�t need any outside help getting the house in order. And the results backed him up: Disney’s theme park business smashed it out of the, well, park, and raked in a better-than-expected $9 billion in revenue. And although Disney�s streaming service dropped more than two million users last quarter, the segment still inched closer to turning a profit. Activist Nelson Peltz took the hint, calling off his boardroom-seat fight the following day.

Why should I care?

Zooming out: All change.
Iger also announced that the company�s reorganizing into three distinct businesses: Disney Entertainment (for the TV and binge-streaming crowd), Parks (for family holidaymakers), and ESPN (a colossal sports network, and the odd one out). That three-way split wasn�t lost on analysts: ESPN was once an all-star performer for Disney, but it�s been acting more like a bench-warmer of late. And although the company swatted away rumors it might auction off the network, it won�t stop investors from wondering whether ESPN�s future is outside the Kingdom�s gate.

The bigger picture: Watch this space.
Cutting costs by $5.5 billion � equal to more than 5% of sales � sounds great for profit margins, but you have to wonder whether slashing costs like this is just a short-term move to fend off activists, or if Disney�s been really overspending. If this is just a short-term stunt, the ploy could end up harming Disney over time. But if the firm actually was that out of shape, keep an eye on its stock: Disney could be about to transform into a leaner, meaner, more profitable outfit.