In its latest move to enhance shareholders' value,
The Walt Disney Company
) now intends to repurchase $6 billion to $8 billion of shares in
fiscal 2014, Reuters reported. Jay Rasulo, the Chief Financial
Officer of this diversified media entertainment company said that
the buyback activity to some extent will be funded by borrowed
capital in a manner that the debt rating is maintained.
If we look at Disney's buyback history, this Zacks Rank #3
(Hold) stock has shown significant jump in its stock repurchasing
activity with this announcement.
The company had repurchased 72 million shares for $3
billion during fiscal 2012, 135 million shares for $5
billion during fiscal 2011 and 80 million shares for $2.7
billion in fiscal 2010. In the first nine months of fiscal 2013,
the company had bought back 49 million shares for $2.7 billion.
In the last concluded quarter, Disney repurchased 12.6 million
shares for approximately $800 million.
We believe that Disney's prudent cash balance coupled with the
capability of generating healthy cash flow from recent
investments made in the past as well as borrowing capacity
provide ample avenues to garner fund for operational activities,
capital expenditures and other expansion programs.
Disney remains focused on deploying its capital toward
expanding its Parks and Resorts business, and in turn, enhancing
its markets and creating long-term growth opportunities. The
company will inaugurate a new theme park resort in Shanghai in
2015. The company also made it clear that it will continue to
extend its wings through acquisitions, as done in the past,
citing examples of Lucasfilm and Marvel Entertainment. Moreover,
the company is gradually enhancing its operations in emerging
economies such as Russia, China and India.
Walt Disney is one of the world's largest diversified
entertainment companies and commands a formidable portfolio of
globally recognized brands, primarily its namesake brand - Walt
Disney, followed by ABC, ESPN, Pixar and Marvel. These renowned
brands offer a strong competitive edge to the company and bolster
its well-established position in the market against major players
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