share repurchase program Archives - The Entrepreneur Times

Disney (DIS) announced a 50% increase in its cash dividend on Wednesday, accompanied by fiscal first-quarter earnings that surpassed expectations, and a reduction in streaming losses. The stock experienced a nearly 12% surge in value on Thursday in response to the positive results.

The reported adjusted earnings per share were $1.22, significantly surpassing the $0.99 predicted by Bloomberg analysts. Disney also provided guidance for full-year fiscal 2024 earnings, projecting $4.60 per share, reflecting a minimum 20% increase from 2023.

While revenue slightly missed expectations at $23.5 billion compared to the anticipated $23.8 billion, Disney declared a cash dividend of $0.45 per share, marking a 50% increase from the previous dividend in January. Shareholders as of July 8 will receive the dividend on July 25.

Additionally, Disney’s board approved a new share repurchase program targeting $3 billion in purchases for fiscal year 2024.

Despite challenges in its linear TV and parks businesses, as well as streaming losses, Disney is actively addressing these issues. CEO Bob Iger has implemented cost-cutting measures, with the company on track to meet or exceed its $7.5 billion annualized savings target by the end of fiscal 2024.

The company made several significant announcements, including a $1.5 billion investment in Epic Games, emphasizing its entry into the world of video games. Disney+ will exclusively stream “Taylor Swift: The Eras Tour (Taylor’s Version),” and a sequel to “Moana” is set to hit theaters in November.

Moreover, Disney outlined plans for its ESPN streaming service, set to launch in fall 2025, and provided updates on its partnership with Warner Bros. Discovery and Fox to launch a new sports streaming service this fall.

In the streaming sector, Disney reported narrowed losses of $138 million, with an increase in streaming prices contributing to the improvement. While core Disney+ subscribers saw a slight sequential decline, the company expects to add 5.5 million to 6 million users in the second quarter.

Disney anticipates reaching profitability in its combined streaming businesses by the fourth quarter of fiscal 2024. The company is also implementing measures, including cracking down on password sharing, which is expected to show benefits in the latter half of the year.

The restructuring of Disney into three core business segments—Disney Entertainment, Experiences, and Sports—has shown positive results. Despite struggles in linear networks, the overall performance, especially in the entertainment and experiences divisions, reflects growth and improvement.

General Motors is poised to announce its fourth-quarter earnings before the opening bell on Tuesday. According to average estimates compiled by LSEG (formerly Refinitiv), Wall Street is anticipating the following:

Adjusted earnings per share: $1.16
Revenue: $38.67 billion

If these projections hold, it would signify a 10.3% decline in revenue compared to the previous year and a substantial 45.3% drop in adjusted earnings per share. GM’s fourth-quarter results for 2022 included $43.11 billion in revenue, net income attributable to stockholders of $2 billion, and adjusted earnings before interest and taxes amounting to $3.8 billion.

In addition to quarterly earnings, investors are keenly observing for any residual or unforeseen costs stemming from the company’s new labor contract, negotiated last year with the United Auto Workers union. Moreover, the focus is on GM’s 2024 guidance.

Analysts on Wall Street anticipate a “flattish” forecast from GM compared to the previous year’s earnings. The normalization of favorable vehicle pricing, which has led to record profits in recent years, is expected. Simultaneously, cost-cutting measures are projected to help offset higher labor costs resulting from the UAW deal.

In November, GM CEO Mary Barra stated that the company is finalizing a budget for 2024 to “fully offset the incremental costs of our new labor agreements.”

GM reinstated its 2023 guidance in November, encompassing net income attributable to stockholders of $9.1 billion to $9.7 billion, or EPS of $6.52 to $7.02; adjusted earnings before interest and taxes of $11.7 billion to $12.7 billion, or $7.20 to $7.70 adjusted EPS; and adjusted automotive free cash flow of $10.5 billion to $11.5 billion.

The guidance factored in an estimated $1.1 billion EBIT-adjusted effect from approximately six weeks of U.S. labor strikes and some costs associated with an accelerated $10 billion share repurchase program announced in November.

Investors are also eager for updates on GM’s new electric vehicles and Cruise, GM’s majority-owned autonomous vehicle subsidiary currently under investigation following an October pedestrian accident in San Francisco. Cruise and GM released findings of internal investigations last week, highlighting cultural issues, regulatory challenges, and leadership shortcomings at the company but concluding that officials did not intentionally deceive regulators. Cruise remains under investigation by various entities, including the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

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