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  • Writer's pictureThe San Juan Daily Star

US stock buyback plans picking up in earnings season, EPFR says

U.S. stock buybacks are picking up, with corporate announcements this earnings season trending above the prior two quarters and above the average of the past 12 earnings periods, according to EPFR.

Companies have announced an average of $6.9 billion worth of buybacks daily through the first three weeks of the fourth-quarter reporting season, according to EPFR Liquidity Offerings, which tracks buyback announcements from companies listed on U.S. exchanges.

That is the highest amount at this stage in an earnings season since the $8.2 billion daily average from the first-quarter 2023 reporting period, while it is also above the $6.5 billion daily average of the past 12 periods.

The volume of buyback announcements is showing “signs of life,” EPFR said in a note.

Goldman Sachs and other strategists have projected a rebound in buybacks this year after a down 2023, which can help support the stock market in 2024.

Meta Platforms last week announced a $50 billion increase in its stock repurchase authorization, as the Facebook owner also initiated a quarterly dividend. Other recent buyback announcements include $1 billion repurchase plans from each of Altria Group, DuPont and Corteva.

Private equity firm KKR & Co Inc said on Tuesday its fourth-quarter distributable earnings rose 4%, buoyed by strong growth in income from asset sales in addition to management and transaction fees.

After-tax distributable earnings, which represents the cash used to pay shareholder dividends, rose to $888.5 million from $851.9 million a year earlier. That resulted in distributable earnings per share of $1, which was higher than the mean Wall Street analyst estimate of 91 cents, according to LSEG data.

KKR said its net profit from asset sales surged 85% to $359.6 million during the quarter, with divestments across its private equity and infrastructure portfolios.

Fee-related earnings jumped 21% to $675.4 million, driven by higher management fee income and stronger revenue from transaction fees that KKR generates mainly by arranging financing for its own deals.

KKR’s private equity funds gained 3% in the fourth quarter, infrastructure funds were up 5%, while leveraged credit funds rose 3%. The value of its opportunistic real estate portfolio, however, fell 1%.

Blackstone Inc, the world’s largest private equity firm, also reported a 4% rise in its distributable earnings last week, as well as a 3.5% gain in the value of its corporate private equity funds and a 3.8% decline in its opportunistic real estate portfolio.

KKR’s net income under generally accepted accounting principles (GAAP) soared to $1 billion, up from $121.1 million a year earlier, driven by investment income from its asset management business.

KKR raised $31 billion of new capital, made investments worth $16 billion, retained nearly $100 billion of unspent capital, and had $553 billion of total assets under management. It declared a dividend of 16.5 cents per share.

JPMorgan Chase said on Tuesday it was embarking on one of its most aggressive bank branch expansions in recent years, with plans to add more than 500 new U.S. locations by 2027 to broaden its footprint in areas where it is under-represented.

The multi-billion dollar investment will see it open new branches in places including Boston, Charlotte, the area surrounding Washington D.C., Minneapolis and Philadelphia, the bank said.

It did not specify the exact amount of the investment.

JPMorgan’s aggressive expansion strategy comes as some other lenders have been shrinking their presence. The number of active branches in the U.S. totaled 77,690 after 123 closures and 80 openings in the month of October, according to S&P Global Market Intelligence.

JPMorgan had the largest network at the end of 2023 with 4,897 branches. Rival Bank of America, which has also been adding new branches, had 3,845 at the end of December.

Buoyed by resilient consumers while bringing in more income from clients’ interest payments as the Federal Reserve raised borrowing costs, JPMorgan made a record annual profit in 2023.

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