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July 2017

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The Country Caller takes a look at why the Seadrill stock was up today

Seadrill Ltd (NYSE:SDRL) stock was skyrocketing on Thursday after reporting its financial results for the second quarter of the fiscal year 2016 (2QFY16). The current environment has been a grim one for companies involved in the oil and gas industry. Thus, for companies to report better than expected earnings, it is an anomaly in the current environment. Investors even rewarded the company accordingly, sending the stock price up as much as 5.14% as of 8:40 EDT.

Seadrill revealed its financial results before the opening bell of the market today. The company managed to report adjusted net income of $292 million surpassing the analyst’s expectations of $223 million. The earnings showed a significant improvement when compared to the previous quarter, where it reported net income of $130 million. However, on a year-over-year (YoY) basis, the earnings were still 32% lower.

The increase in the earnings could also be due to the company’s ability of cutting costs. One of the most common methods to cut costs comes from reducing employee headcount. As mentioned in Seadrill’s press release, the company has brought an 8% reduction from the employee levels at the end of 2015. In addition, Seadrill has also managed to bring its average operating costs by 17% and operational expenditures for Jackups by 28%.

The company for the full year has also brought about some optimistic assumptions. Seadrill expects the company to see a total cash savings of $390 million by the end of this year.

Seadrill in the latest quarter reported revenues of $868 million, falling from $891 million from the preceding quarter. The company in the press release highlighted that the decline was mainly because of the day rate reductions and due to the West Castor and West Prospero contracts ending. The company was also able to achieve a 98% utilization.

Per Wulf President and CEO of the company regarding the earnings said: “During Q2 2016 we have improved on the record uptime we achieved in Q1, reaching 98% economic utilization, whilst continuing to see our costs reduce quarter over quarter.”  He also added: “Our priorities for the remainder of the year continue to be delivering safe and efficient operations for our customers whilst concluding on our financing plans.”

Height Securities analyst says UK’s exit from EU could lead to inflated protectionist policies for US steel producers like AK Steel and its peers

Yesterday, shocking news emerged that the United Kingdom has parted its ways from the European Union, leaving the investors in dismay, thus a majority of global financial markets were trading in red. The industry experts believe that Brexit (Britain’s exit from European Union) has strong and wide implications for the United States’ economy, which is already under marred by several headwinds. The chief of the United States central bank, Federal Reserve, along with top monetary policy maker Janet Yellen, have already warned the public of the adverse impacts arising from Brexit. They mentioned that UK’s vote to leave out the EU “would negatively affect financial conditions and the U.S. economy.”

The import/export of goods between two nations only comprises 0.5% of United States’ economic activity. However, the connections go well beyond direct trade between the two global powerhouses.

The experts in the industry suggest that Brexit would create a domino effect on the economies across the globe and also damage the world economics. Following the heightened and heated discussions on Brexit – which has caused distress to the global economies – Height Securities analyst released a research note shedding light upon how the recent event could turn out for steel producers in United States.

The analyst at the investment firm mentioned that the United States’ steel producers such as AK Steel Holding Corporation (NYSE:AKS), United States Steel Corporation (NYSE:X) and Nucor Corporation (NYSE:NUE) may be impacted. The stocks closed down yesterday, as AK Steel shed 7.7% of its value; Nucor was down about 4.1% while US Steel stock tanked 11.36%. Furthermore, the analyst elaborated that if Donald Trump wins in November, would increase the chances drastically that United States would impose stiff import taxes on all foreign steel products.

The latest update fixes almost all encountered bugs in the game

A brand new update for Minecraft is set to make its way onto PlayStation 4, Xbox One, Wii U, and pretty much every other gaming platform that runs this incredible open-world title. However, keep in mind that the latest patch is for adding in fixes, and not new features.

The patch titled, Update 38 for the Xbox One or Update 1.41 for the PS4 introduces several fixes and changes for some of the game’s most recent bugs. So, if you have been complaining about some glitch in the game, it’s possible the developers might have a fix waiting for you in this update.

For more details, check out the update’s complete change-log below:

Fix for Horses not jumping to the correct height. Re-entering a tutorial area while the playing the Tutorial will reset the chests. Fix for Slab blocks not blocking light. Fix for Chickens not dropping Cooked Chicken when they die on fire. Fix for Blazes not dropping Glowstone Dust when they die. Fixed the drop rate of Gold Nuggets. Fix for Zombie Pigmen not dropping Gold Ingots when they die. Fix for tamed Ocelots remaining hostile to anything they were attacking before being tamed. Fix for crash when spawning too many Shulkers. Fix for Enderman not taking damage from rain while in a Boat. Improvements to framerate when throwing a lot of Lingering Potions. Fix for Wither Skeleton being able to walk through two block high spaces. Minor changes to Battle Mini Game maps to close off areas that should not be accessible. Fix for lighting issues when digging down in the spawn area. Fix for rename Record losing its name after being in a Jukebox. Added chance of Melon, Pumpkin, and Beetroot Seeds, and Jungle Saplings spawning in the Bonus Chest. Fix for a range of tooltips that would appear when the action was not available. Fix for Mob Spawner error that occurred after using a spawn egg to change what it should spawn. Fixes to End Gateway generation. Fix for End spawn location being in the wrong place. Added a particle effect and sound effect when a mob spawner fails to spawn due to spawn limits. Fix for crash when placing a Sign on top of Tall Grass. Stop End Crystals exploding when “TNT Explodes” is disabled. Fix for Hoppers not collecting items above them. Added new 11 achievements for Survival. Added new 7 achievements for Tumble.

Comment below and let us know what you think of Minecraft’s latest update, are you excited?

The firm’s analysis suggests that the e-tailer’s growth in e-commerce would cause only a modest impact on Google

Without a doubt, Amazon.com, Inc. (NASDAQ:AMZN) has revolutionized the way of shopping from going to a store to making things delivered at the doorstep. Now, Nomura analysts are concerned if the online retailer would pose a threat to Alphabet Inc’s (NASDAQ:GOOGL) owned search business, Google. According to recent studies from a third party, Amazon’s product searches have increased over the past year.

Nomura analyst, Anthony DiClemente said the strong growth of Amazon’s business may create general risks to Google’s retail search business. Firstly, the extent to which the e-tailer captures a great share in overall e-commerce space increases the possibility that the consumers transact and shop exclusively on Amazon platform.

Secondly, it was stated by Mr. DiClemente: “Amazon’s share gains eventually provide Amazon with the potential to expand its search ad business. Given the majority of product searches now begin on Amazon (55% vs 45% a year ago), we believe this is an opportunity for Amazon, even if it’s not a near term priority for management.”

However, Nomura analyst concluded that Amazon’s strong growth would only impact less than two percent of the Google forecast for 2020 revenue, even if the company is able to enhance e-commerce market share and advertising revenue well ahead of their base case estimates. According to the analysis by Mr. DiClemente, Amazon would be able to increase its share in e-commerce market if overall e-commerce revenue grows, which would also help in related search ad revenue growth, causing very little impact to Google.

As of now, Nomura analysts are of the opinion that the e-tailer industry has a worth of $12 billion and expects it to reach $20 billion by 2020. Amazon currently has a market capital of $396.68 billion, and its shares trade at a 209.32 price to earnings ratio.

Analysts at JP Morgan lowered rating on BOX Stock from Overweight to Neutral, following first quarter results

Box Inc (NYSE:BOX) shares tanked more than 10% in the last extended market trading session, right after the company disclosed financial results for the 1st 2016 quarter. Box managed to provide better results than expected, surpassing the Street’s expectations. However, the company provided weak guidance which caused the aforementioned decline in its share price. Analysts at JP Morgan slashed its rating from Overweight to Neutral, following its weak quarterly release.

The company reported $90.2 million of net revenue, versus the $88.65 million consensus estimates. Moreover, adjusted loss per share (LPS) came in at 18 cents, beating the Street’s estimates of 24 cents. Box Chief Financial Officer, Dylan Smith shed more light on the company’s quarterly performance while stating, “We are confident in our growth opportunity, driven by our product differentiation and expanding market, and we remain committed to achieving positive free cash flow in the fourth quarter of this fiscal year.”

Analysts at JP Morgan raised caution on the company and expect the stock to trade sideways in near term, primarily because of its soft quarterly performance. Furthermore, JP Morgan believes that Box’s recent changes in its billing terms can limit the share upside in the coming quarters. The research firm also made a downward revision in its price target from $18 to $14, citing 40% rise in share price since mid-February. During the quarter, the company acquired more than 5,000 new users while forming partnership with several large enterprises including the likes of Brooks Brothers, Airbnb and The Whirlpool Corporation.

Additionally, Box provided bleak outlook for full year 2016 as the company expects to post revenues between $391 and $395 million, in comparison to the Street’s estimate of $393.07 million. On the other end, Box is forecasting adjusted loss per share in 78-75 cents range whereas Wall Street expect the company to report 84 cents. Box shares have declined almost 9% since the start of fiscal year 2016, compared to NASDAQ Composite Index which slipped a little over 1% in the same time frame.

It seems that the console is reach the end of support

Nintendo Co. Ltd. (OTCMKTS:NTDOY) is asking retailers to place their orders for Wii U that will be a final shipment. The report comes from Gameseek, revealing that the final order deadline is September 30, after which retailers who were unsuccessful in marking an order will not be able to receive any more Wii U shipment.

It comes off as a surprise that Nintendo is apparently moving forward to pull the plug on Wii U so early. Is Wii U being completely phased out? We don’t know, but the report does seem to suggest that the retailer orders will be the number of Wii U consoles Nintendo manufactures, maybe for this year. It seems unlikely that Wii U won’t be manufactured anymore after the upcoming stock is sold out. It’s unclear at the moment, and it could be a case for EU region only. But all of this doesn’t come off as a surprise as Nintendo previously confirmed its intention to produce only 800,000 Wii U consoles this year. It should be expected that going forward, the console is going to receive limited support.

The move comes as we draw closer to Nintendo’s NX launch, which is slated for March next year. Nintendo is yet to unveil the handheld but Wall Street Journal analyst predicts it will be officially revealed early October. Another report this week claimed that Foxconn has started trial production of NX. All of this seems to suggest that Nintendo has switched gears to accelerate plans for the console’s reveal and launch.

According to multiple leaks, NX is a handheld/console hybrid in nature. It is a handheld that can be plugged in a docking station and act as a console for living room entertainment.

The company says to have never considered shifting its production facilities to the region

Newly elected president Donald Trump has taken credit for stopping Ford Motors Company (NYSE:F) from shifting its production to Mexico. The 70 year old president said that he received a call from Ford’s executive chairman Bill Ford, who said that the company does not plan to switch production to Mexico. Perhaps the policies of the new elect are not friendly for multinationals who want to shift production to foreign regions, as he insists them to open production facilities in the US only.

As for Ford, the company says to have never considered shifting its production facilities to the Northern America region, although it did inform Mr. Trump about its decision to stick to Kentucky. The $47.09 billion company has its production facility in Kentucky, where it builds its Lincoln MKC small sport-utility vehicles at the Louisville Assembly Plant. Although human capital is cheaper in Mexico, there are some repercussions of shifting, as Trump has warned of higher tariff’s, should the company plan to start manufacturing elsewhere.

The policies of the Republican candidate are positive for the auto sector, as he insists companies to build the vehicles locally, while they will also protect against foreign brands. Moreover, he also said that he is going to enter into a trade war with China, which accounts for majority of the sales of US automakers.

The automaker seems to be doing well on fundamental grounds, as it reported a modest bottom-line. Moreover, investors are optimistic as short interest has decreased by 10% as per recent data. Institutional investors such as Vanguard Group and Evercore Trust also hold long positions in the company

Additionally, the Street seems to be optimistic about the future, as renowned sell-side firms including Bank of America and Credit Agricole stick to price targets with decent upsides. The consensus price target of $13.93 implies a more than 17% upside over yesterday’s close.

New game bundles are heading to Xbox One this fall

Microsoft Corporation’s (NASDAQ:MSFT) revealed plans for the future of Xbox last month at E3 2016, which includes a new slimmer version of the existing Xbox One model. The Xbox One S has 40% smaller body than the current Xbox One, improved controller with texture grip and Bluetooth connectivity, HDR support, 4K video and game support (upscaled).

Microsoft has thus far announced three models; 500GB, 1TB and a special 2TB model that is going to be the first one available from this August. People might see game bundles as well once Xbox One S is available. Twitter user Ekimhas provided us a preview of Halo 5: Guardian’s 1TB Xbox One Game Bundle. Check it out below:

Additionally, elsewhere in a different tweet, the user also revealed that Gears of War 4 edition is on the way as well. It will feature a unique theme that resembles the Gears of War 4 Elite Controller. There is not any word on when the bundles will be available but Gears of War 4 bundle should be available for pre-order at least a month before the game’s October release date.

We also do not know if 500GB and 2TB versions will get the same bundles or not. Since Halo 5: Guardians bundle features no special theme, it should be priced at the standard $249. It is logical because Halo 5 already had a limited edition treatment last year.

Although available for pre-order at retailers, Microsoft has not revealed when the 500GB and 1TB versions will be available. The news regarding Gears of War 4 bundle does suggest that 1TB model will arrive by October in time for Gears of War 4’s launch. The 500GB model could launch during the same time or a bit later.

Bernstein analyst devises a path to trillion dollar market-cap for Apple Inc (AAPL) through an “Apple Family Plan”

Toni Sacconaghi – an analyst at Bernstein issued a research note today, reiterating an Outperform rating on Apple Inc (NASDAQ:AAPL) stock along with a price target of $135.

Moreover, the analyst also laid out a pathway for the tech giant to transit from just a hardware company into providing the customers with smartphones, tablets, a wide array of services and entertainment facilities. Additionally, bundling all these products and services would help Tim Cook’s company to reach the trillion dollar market-capitalization mark.

Mr. Sacconaghi also shared his family’s hypothetical example in his research report. He mentioned that his family requires three iPad Minis and a niPad Air – each of which are needed to be replaced every three years. Along with this, the analyst’s family also requires three iPhones which are replaced every two years. Furthermore, in his example, it would only cost around $140 each month, which is well below the analyst’s monthly cable bill and wireless bill.

On the other hand, adding Apple Music which would cost $15 montly, iCloud storage for $10 per month and a speculated but soon to be released OTTP television offering for $40 each month increases it to an estimated $207 per month which still accounts for savings.

Bernstein analyst also highlighted that Apple is taking the right and big steps in this direction with the iPhone upgrade program but the strategic shift to a full subscription model is likely to harm both the Apple’s financial statements and its ties with the telecommunication companies.

A total of 50 analysts at Wall Street provide coverage on Apple stock. Of these, 46 analysts recommend the investors to Buy the stock, another six analysts suggest a Hold while the remaining two analysts believe the stock is a Sell.

The 12-month consensus price target on the stock is $124.60, carrying a return potential of nearly 32% against the stock’s current price.

With Yahoo! Inc. (NASDAQ:YHOO) entertaining bids for the sale of its core, SunTrust highlights the company’s less visible assets and how they will play into the sale

Yahoo! Inc. (NASDAQ:YHOO) was planning to spin off its core into a new entity but pressure from activist investors has led Yahoo’s board to invite bids to interested buyers. The company’s assets have been valued in the range of $6-8 billion but a number of underappreciated assets could help them reach the $10 billion price tag it is looking for.

Bob Peck, analyst at SunTrust Robinson Humphrey, in recent coverage of Yahoo maintained a Buy rating on the stock and added to its price target from $40 to $44. Peck has highlighted three assets of the company that in the analyst’s opinion entitle it to a higher valuation than the $6-8 billion figure that Yahoo has reported for its assets. First is the royalties the company calculates from its spinoff Yahoo! Japan. The Yahoo! Japan revenue stream is highly lucrative and currently represents 30% of the company’s total advertising revenue in 2016. Concerns regarding the transferability of the cash are overblown and misplaced which is apparent from the contract between Yahoo and Yahoo! Japan.   

Peck has also called for a revaluation of Yahoo’s intellectual property. The company has close to six thousand patents to its name which the analysts values in the range of $1-3 billion. Since most of these patents are publicly available they could prove valuable assets for company’s considering acquiring Yahoo’s core. The first category of assets highlighted by the analyst was the company’s real estate holdings. Yahoo owns approximately 1 million square feet in real estate and buildings which the SunTrust analyst has estimated to be worth close to $1 billion. All in all, these assets add anywhere from $2-4 billion to Yahoo’s valuation easily making the company worth the $10 billion paycheck they’re asking for.