Stock index futures were slightly higher in premarket trading on Thursday morning, with investors looking pleased with the latest readings on consumer-grade inflation. In general, market participants seem bullish, with the main benchmarks moving to their best levels of the year since the end of yesterday.
Walt Disney (DIS 0.81%) and Taiwan Semiconductor Manufacturing (TSM 0.63%) were in the news overnight, and both companies saw their shares move higher early Thursday in response. Disney appears to be facing a potential leadership battle over the future direction of the entertainment and media giant, as Taiwan Semi released quarterly results that shed light on the current state of the world. semiconductor market.
Disney gets a challenge
Disney shares rose 2% in premarket trading Thursday. The House of Mouse named a new chairman of its board of directors, but that choice was not enough to dissuade activist investors from appointing one of their own to join Disney’s governing body.
Disney said late Wednesday that it had chosen Mark Parker to be the chairman of Disney’s board. Parker has served on Disney’s board since 2016 and also acts as executive chairman of the athletic footwear pioneer’s board of directors. Nike. Current board chairwoman Susan Arnold has reached the 15-year limit and will not be eligible to continue beyond the annual shareholder meeting.
But the biggest news came from Trian Fund Management. The asset management company has appointed founder Nelson Peltz to join Disney’s board as a director, citing numerous problems at Disney, including failures in management succession planning, ongoing losses in the video streaming business, and little discipline in strategic acquisitions.
Peltz has a history of bringing change to major consumer companies, and many investors like the idea of an outside influencer holding back. new CEO Bob Iger in light of the big declines in the Disney stock market recently. Others fear the proxy battle will be a distraction as the company tries to overcome business challenges in a tough economic environment.
Taiwan Semi grows, but sees potential problems ahead
Meanwhile, shares of Taiwan Semiconductor Manufacturing were up more than 3% before the market opened Thursday morning. The global semiconductor foundry delivered strong results for the fourth quarter of 2022, but also maintained a conservative view of how 2023 could play out.
Taiwan Semi’s fourth quarter numbers were strong. Revenues of $19.93 billion were up 27% year-over-year, while net income jumped 78% from year-over-year levels. Gross margin rose 9.5 percentage points to 62.2%, as shipments of leading-edge 5-nanometer and 7-nanometer semiconductor chips accounted for more than half of its total sales.
However Taiwan Semi seemed to emphasize the fact that its quarterly results represented a slight slowdown from its third quarter performance. When measured in US dollars, revenues are down 1.5% from the quarter ended in September, while net income is higher. CFO Wendell Huang pointed to weaker demand in its end markets and inventory adjustments from its foundry customers for the slowdown.
Looking ahead, Taiwan Semi sees weak macroeconomic conditions continuing to weigh on demand, projecting that revenues will drop to between $16.7 billion and $17.5 billion in the first quarter of 2023. However, in the long term going forward, the semiconductor foundry giant expects its margins to remain solid. and the need for its customers to keep up with advances in technology should help Taiwan Semi maintain its leadership role in the chip industry.
Dan Caplinger has positions at Nike and Walt Disney. The Motley Fool has positions and recommends Nike, Taiwan Semiconductor Manufacturing and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long January 2025 $47.50 calls on Nike, and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.