(Reuters) -Paramount Skydance ( PSKY ) shares rose 5.5% as the newly merged media firm announced more cost cuts and plans to invest $1.5 billion in its streaming and studio divisions, lifting investor confidence following its first results since the merger.

The results offered an early glimpse into the financial impact of CEO David Ellison's rapid overhaul of Paramount to bring the storied media house into the digital age.

The tech scion who founded Skydance Media has secured a Timothee Chalamet-led heist film, signed "South Park" creators Matt Stone and Trey Parker to a five-year agreement and struck a deal with Activision to bring "Call of Duty" to theaters. Paramount is also looking into a potential takeover of Warner Bros Discovery.

The efforts are expected to help bring in $30 billion in revenue by 2026.

The company has also raised its savings target to at least $3 billion, and said it would shed 1,600 jobs tied to asset sales in Argentina and Chile, on top of 1,000 layoffs in October and 600 voluntary exits.

"While we're encouraged by Paramount's vision, there remains a significant amount of execution across direct-to-consumer (DTC) and filmed entertainment, the benefits of which may not be visible until later in 2026," J.P.Morgan analysts said.

Analysts have also pointed to near-term cash outflows and persistent risks in the company's TV Media segment, along with higher-than-expected transformation costs, including a $500 million restructuring charge in the fourth quarter and $800 million in one-time investments for 2026.

Ellison said the company was determined to lead through a "generational transformation" in media, with plans to unify its streaming platforms and ramp up theatrical output to 15 films in 2026.

Paramount Skydance ( PSKY ) shares, which have gained almost 46% this year, trades at a forward price-to-earnings ratio of 14.58, below Walt Disney ( DIS ) at 16.96 and well under Netflix ( NFLX ) at 35.23.

(Reporting by Rashika Singh in Bengaluru; Editing by Devika Syamnath)