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July 2017

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FINANCIALS

United Parcel Service, Inc. (UPS) Price Target Raised Following Q2 Results

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Currency exchange rates and lower fuel surcharges slowed down revenue growth for United Parcel Services

The Country Caller takes a closer look at United Parcel Service, Inc. (NYSE:UPS) stock following its second quarter results for fiscal year 2016. United Parcel reported its Q2FY16 financial results last Thursday, July 29. The company met the Street’s expectations on its bottom line and was able to beat the Street on its top line by a small margin. Oppenheimer restated an Outperform rating on the stock. It also raised the price target by 3.57% to $116 following the company’s Q2 results.

United Parcel Services reported stronger earnings for the second quarter by announcing earnings per share of $1.43 in Q2FY16. It met the Street’s expectations on its bottom line. Analyst Scoot Schneeberger also noted that the company was able to beat his estimate of $1.41 in EPS. The company experienced a 6% year-over-year growth in its EPS. Furthermore, the world’s largest package delivery company posted $14.63 billion in revenues. It managed to surpass the Street expectations by a total of $24 million. The revenues posted by the company led to witness 3.8% YoY increase in its top line. Mr. Schneeberger believes that this revenue growth was in line with his expectations and the estimate issued by him and his team at Oppenheimer.

Not only this, the international operating profits of the company increased by 11% YoY to $613 million. This marked the sixth consecutive quarter to experience double-digit growth in international market. The company’s net income also rose by 3.2% YoY to $1.27 billion in this season. To quote more figures, its operating profits were raised by 4% YoY for the same period and the US Domestic Package segment saw a rise of 2.7% YoY in its operating profits.

However, the Supply Chain and Freight segment saw a decline of 7.2% in its operating profit this season. Despite this decline, the division reported impressive growth in revenues of more than 13% YoY to $2.5 billion. The company credits this increment to recent acquisition of Coyote Logistics during 3QFY15. UPS earnings were impressive in LTL and Air Freight Forwarding markets.

The $94.78 billion company blames its hampered revenue growth to currency exchange rates and lower fuel surcharges. According to the company officials, revenue increased by 4% if currency-neutral basis was assumed. Also, the lower fuel surcharges had harmed the revenue growth and cut it by approximately 120 basis points.

Despite this hampered revenue growth, the company was able to post strong results. The company credits this to e-commerce growth marked by growth in their B2C segment.

Furthermore, the company also experienced healthy export volumes along Europe-to-US trade lane market by double digits growth. Due to this, the international package division was able to expand its operating margin on YoY basis through pricing, network efficiencies and overall growth in volume.

Also, the domestic package segment showed improvements in its margins. This was mainly driven by improvements in productivity due to better technology. These improvements were translated into lower costs per unit.

However, the Supply Chain and Freight department is a bit of concern for the company and remains to be challenging. Despite this, UPS restated its EPS FY16 guidance with the range of $5.70-5.90 compared to the Street’s expectations of $5.80. This would lead to 5-9% growth in its EPS YoY.

While Oppenheimer maintains its Outperform rating on the stock, other analysts also continue with their bullish stance over the stock of supply chain management solutions provider. According to FactSet Fundamentals, analysts uphold seven Buy, two Overweight, 15 Hold, and one Sell ratings on the stock. The 12-month average target price is set at $109.53, an increase of 1.41% over the last close.

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Technology

How to Update the Samsung Galaxy A5 to Android 7.0 Nougat

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Get the latest flavor of Android on your Samsung handset without waiting for the official update

Aside from most Internet forums and communities, the world doesn’t really resolve around flagships smartphones. When it comes to number of units sold, the mid-range and budget smartphones make up most of the quantity. Samsung is especially dominant in this category with its stellar A and J series of handhelds.

Samsung Galaxy A5 stood out as one of the most popular smartphones of 2015. With its metal body, Super AMOLED screen, and great battery, it stood as the phone of choice for many. However, there is an issue with the device. It’s still stuck on Android Marshmallow (Lollipop for some) and there is no update to Nougat in sight.  

Fortunately, thanks to the folks over at XDA developers, you can install Android 7.0 Nougat manually on your phone right now. 

Note: This ROM Build is still under development, so Cellular Data is not working right now. The bugs will be ironed out with time, however if you want to be an early adopter, you’ll need to make some sacrifices. 

Here’s What You Need 

·         A Rooted Samsung Galaxy A5 with Custom Recovery (A500) 

·         Unofficial CM14 Android 7.0 ROM. Download here. 

·         OpenGapps. Download here. 

·         Wifi Fix ZIP. Download here. 

Step 1: Download all the required files from above onto your computer. Next, connect your phone to the PC and copy the files to the root of your device’s internal storage. 

Step 2: Now, you need to reboot your device into Recovery mode. To do this, first power off your device. Press and hold Home + Power + Volume Up until the phone boots into Recovery. 

Step 3: Once you’re in Recovery, navigate to Wipe and swipe right to Wipe Data/Factory Reset. Next, go to Install and select the ROM ZIP file. Tap on Add more Zips and add the Gapps ZIP and the Wifi Fix ZIP. 

Step 4: Swipe right to flash the files. 

And that’s it. The files will flash and once it’s done, just reboot your device. The first reboot will take 5-10 minutes, following which your device will sport Android 7.0 Nougat.

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Energy

Chesapeake Energy Corporation (NYSE:CHK), Reasons for a Bull Run

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The recent OPEC Meeting seems to be the catalyst for a bullish wave in oil prices lately, as the organization insists on cutting oil supplies to support prices

The recent bullish wave in international oil prices has come to the rescue of oil producers, as their margins start to improve. That being said, the commodity is trading above $50 currently, and shall sustain this level going forward, which in turn may lead to a rally in oil stocks such as Chesapeake Energy Corporation (NYSE:CHK).

The recent OPEC Meeting seems to be the catalyst for a bullish wave in oil prices lately, as the organization insists on cutting oil supplies to support prices. Moreover, a drop in U.S crude reserves for over 5 weeks has also helped to stabilize prices. Should the demand-supply gap continue to contract, we may expect an even more decrease in oil prices going forward.

The Oklahoma City-based company has suffered a lot due to low oil prices over the past one year, as stock prices went as low as $1.78 earlier this year. However, the stock has recovered somewhat in recent times. Chesapeake has turned its focus towards financial management lately, and is looking to retire majority of its debt this year. Moreover, a few of its transactions that relate to capital restructuring have also contributed in improving its financial position.

Although the company has suffered on the profitability end, it has shown improvements in its operations as they consumed less of its liquid resources in the recent quarter. The Street has recently been adding on to the bullish views lately, as renowned brokerages such as Nomura and SunTrust Banks have increased their price targets for the stock. The consensus PT has also jumped to $7.46, which reckons an upside of over 12%. TheCountryCaller persists that the oil exploration and production company’s stock is a good pick for reasonable gains in the future. Let’s see if we get to see a rally today.

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Gaming

Street Fighter V: New Alternative Costumes Unearthed in Latest Update

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R. Mika has new feathers that need to be plucked

The scheduled Ver. 1.02 update is now live for Street Fighter V and has given data miners the opportunity to excavate for new information.

Thanks to the work of NeoGAF user Garrett Hawke, we are now being informed that Capcom is bringing in loads of new costumes for almost every character in the game. Assets for each costume were hidden away in the files associated with the latest update. However, they couldn’t remain hidden for long in face of the tenacity of the community’s data miners.

All of the new costumes have been slapped together to form a small montage in the video below. Those interested to know how their favourite characters look in new duds can simply watch through the two-minute long clip.   

Picking from the lot, Nash is receiving a rather sleek green body armor, Zangief looks ready to join a motorcycle gang, Rashid has seemingly just returned from a Prince of Persia cosplay event, R. Mika’s wrestling outfit is getting a feathery overhaul that is guaranteed to tuheads, and there’s a burning question mark over what Capcom was thinking when designing Ken’s new wardrobe. There are new outfits for F.A.N.G, Necalli, Vega and Dhalsim as well.  

A second update is now being prepared for Street Fighter V by Capcom, which is to be released on March 30. This is going to add Alex, one of the fan favourites, as a new character to the game’s roster. In any case, Capcom has assured that the character’s campaign will help players eaenough currency to unlock Alex with ease.

 

 

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Consumer discretionary

Pandora Media Inc (P): Mizuho Bullish on Preannouncement, Cautious on FY17 Strategy

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Mizuho remains cautious over Pandora’s growth and sustainability

Mizuho Securities analyst, Neil Doshi, expressed bullish sentiments over Pandora Media Inc.’s (NYSE:P) earnings for fourth quarter of fiscal year 2016 (4QFY16) on January 13. However, he remains critical over the company’s FY17 strategy and believes it is critical. Consequently, the analyst maintained his Neutral rating along with a price target (PT) of $12. Shares of the company traded in green yesterday, jumping 6.33% during active trading session.

According to Mr. Doshi, Pandora announced yesterday that it is well positioned to exceed its 4Q revenue outlook of $362-374 million. This is considerably better than Mizuho Securities and Wall Street analysts’ prediction of $370 million and $369 million, respectively. Moreover, the online music streaming services provider further announced that its 4Q EBITDA loss is also expected to be better than its previous outlook of a loss of $39-51 million. It also better than consensus and firm’s prediction of a loss of $42 million and $45 million, respectively.

Neil further stated that the firm believes that the $2.95 billion company’s strength was driven by its advertising business, which was quite positive as its 3QFY16 ad RPMs growth came in at 2%. He continued, “We haven’t seen a beat quarter at P for most of 2016, so this is a clear win for the company.” Nonetheless, the analyst and his team remain cautious unless they find out how sustainable Pandora’s measures are to drive similar growth in FY17.

The analyst also observed that the company announced to reduce its workforce by 7%. He believes that this is likely to result in annual savings of roughly $25 million. Furthermore, these savings are considerably meaningful to Wall Street and firm’s FY17 EBITDA loss prediction of $56 million and $55 million, respectively.

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Technology

Microsoft Corporation (MSFT) Windows Phones Now Support Fingerprint Login

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Logging into a Windows Phone could not have been simpler

Microsoft Corporation (NASDAQ:MSFT) Windows Phones have lacked in many ways. Unlike Android phones and iPhones, Windows phones desperately lacked the fingerprint support for login. However, the company has finally made the feature available for Windows phones just in the nick of time.

Windows Phones are already capable of facial recognition support for login, and now it will be possible to do so through fingerprint as well. Microsoft made the announcement during the WinHEC conference this week. Additionally, the company stated that the feature will be a part of the Windows 10 Mobile update which will be rolled out this summer.

That being said, the feature will only work if said Windows Phones come with the necessary hardware to support it. Additionally, it will be interesting to see whether Windows phones, like the HP Elite X3, which can transform into a laptop, will also offer the aforementioned feature.

Microsoft has stated that while most manufacturers have the necessary experience needed to create the right hardware to support the new feature, it will take some time before it gets adopted and accustomed to different kinds of scanners out there. For now, the feature is being extensively tested, and is expected to make its way to desktop and mobiles in July.

All in all, Microsoft is playing all the right cards in regards to its Windows 10 OS for desktop and mobile. The tech giant is taking keen interest in its target audience’s feedback, and has slowly and gradually implemented new features and tools taking it into account, which is a sure recipe for success.

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Technology

The Amount of Money Kim Kardashian’s Mobile Game Is Making Is Ridiculous

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Perhaps all celebrities should begin work on their own mobile games as well

It’s not news that the free-to-play Kim Kardashian: Hollywood mobile game has surged in popularity ever since its release in 2014. Currently available on both iOS and Android, the game has attracted quite a large following, which is surprising to say the least, considering how the internet has never taken the American reality television personality that seriously.  

Kim Kardashian has herself been pretty vocal in the past about her game, relaying how it’s a booming success. However, we’ve never been told from a revenue point of view, just how high that success goes. Today, the model took to Twitter to mention (via GameSpot) an “$80 million video game cheque” that had us rubbing our swollen reddened eyes.  

The celebrity tweeted about how she had received an $80 million cheque from the game, out of which she was busy transferring $53 million to the company’s joint account.

Kim Kardashian: Hollywood tasks players with doing all sorts of chores in order to raise their fame and reputation levels in Hollywood. As it is with most free-to-play mobile games, there’s a limit to how much you can do in a single day. Meeting that means looking at the game’s microtransactions, which not only gives you additional tries, but also various other in-game goodies. Suffice to say, there are a lot of people currently paying real-world cash for those items if Kim is cashing in such large cheques.  

A lot has to do with the game’s promotional campaign. Kim herself heavily promotes the game using her social media accounts, showing her millions of followers what new updates are arriving for her game and what more to look for in the future.

In light of Kim’s success, her sisters have also launched their own games, with Glu Mobile revealing that it plans to release a Taylor Swift game later this year; that’s simply frightening.  

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FINANCIALS

UBS Group Lifts NVIDIA Corporation Price Target After Solid Q3 Beat

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The analyst expects NVIDIA Corporation to enter new phase of growth

NVIDIA Corporation (NASDAQ:NVDA) reported Q3FY17 results after the conclusion of market hours yesterday. Following the Q3 call, UBS analyst Stephen Chin upgraded estimates and raised the price target on NVIDIA Corporation. He commented that the company is still in the early stage of growth and advises investors to invest in the stock for rapid growth and long-term sustainability. NVIDIA is currently investing in many key areas of growth and is expected to become the leader in machine learning and artificial intelligence arena in the next few years.

The Q3 print of the corporation lists revenue of $2 billion, way ahead of the consensus of $1.69 billion with impressive growth rate of 52.8% y/y during the quarter. The revenue for Q3 is the highest the company has ever been able to post. It highlights strong growth in company’s fundamentals. The earnings per share for the quarter amounted to $0.94, beating the consensus estimate of $0.57 comprehensively. They are also the highest ever reported by NVIDIA in a single quarter.

The datacenter revenues accelerated rapidly and were far higher than analyst’s estimate of $166 million. Virtually, NVIDIA has played every move in the best way possible and if the company is able to accelerate its machine learning business, then it will be able to almost double its run rate next year. For the fiscal year 2017, the analyst models for Net Income of $1.8 billion with Free Cash Flow of $1.3 billion.

The analyst reaffirmed Buy rating and raised price target to $90 from $71. The analyst ratings for the company are 7 Buy, 11 Outperform, 12 Hold, and 3 Underperform. NVIDIA traded at a price of $85.40 and gained 26% since the open of the market today on strong earnings.

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Energy

Petroleo Brasileiro SA Petrobras (PBR): Employees Demand Reduction in Working Hours; Go on a Strike

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The state-run oil company’s workers at Campos Basin approve a strike that is expected to commence this Friday

Following the positive outcome of OPEC meetings with non-OPEC members in Vienna last month, oil prices have shown slight rally recently. However, energy companies are back to square one. The price rally is crucial for Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) that has recently finished dealing with the after math of corruption scheme—a tragedy that not only dented its balance sheet, but also shook the entire Brazilian economy.

In lieu of the positive sentiment being raised in the energy market, the state-run energy major is on its way to boost production levels to fortify its balance sheet position. The aforementioned move has been long due since Petrobras had to deal with corruption scandal along with low crude environment.

In an attempt to increase its output levels, the company’s workers are being pushed to work overtime. This is what led its workers at Campos Basin approve a strike that is expected to commence this Friday.

As reported by Reuters, citing crude oil workers union of Petrobras, labor at the basin are urging its employer to decrease their number of hours. Additionally, the workers have even proposed some amendments in their contracts.

The Campos Basin is accountable for 60% production of the country’s crude. Although Petrobras has proposed a 6% increase in employees’ wages, the workers have still refused it. The company declined for further comments on the matter.

It has been observed that the energy producer has even offered increased wages in the past, surpassing the country’s inflation rate. Post Brazil’s inflation rate nearing 8.9% in September, the workers had indicated that a strike was underway.

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Consumer discretionary

Tesla Motors Inc (TSLA) Commences Mass Production of 21-70 Cells at Gigafactory

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Tesla and Panasonic kick off mass production of battery cells at the Gigafactory for EVs and storage products

Over the past year, Tesla Motors Inc. (NASDAQ:TSLA) had been expecting to start the battery cell production at the Gigafactory in Nevada by the end of 2016. While not confirming the production initiation, the automaker and its battery partner Panasonic started the project for qualification last month; though, the announcement of the “mass production” was made today during the investor event at the factory.

Tesla expects to deploy these battery cells to power Tesla Energy products – the Powerwall 2 and Powerpack 2 – and its upcoming all-electric compact sedan, the Model 3. The 21-70 cells, with dimensions of 21mm by 70mm, are thicker and longer than the previous cell format of 18mm by 65mm.

The high performance cylindrical cells have been jointly developed by Tesla and Panasonic; the product is aimed to provide best performance with lowest production cost for both electric vehicles (EVs) and storage products.

Tesla said in a statement, “At the heart of these products are batteries.”

While the cells are already being used in the storage systems, they will be produced for the Model 3 in the second half of 2017. The company expects to achieve annual battery cell production of 35GWh by 2018, which is equivalent to the entire world’s battery production combined.

While hiring “several thousand local employees” this year alone, Tesla and Panasonic plan to employ 6,500 workers at the Gigafactory at its peak production, as well as 20,000-30,000 more jobs in the nearby areas.

Media has been criticizing the auto giant for delaying Gigafactory’s opening and construction. Therefore, it reiterated that the plan is being constructed in phases to ensure that manufacturing starts immediately in the completed sections and continuously expand thereafter. The approach will help Tesla in learning and continuously improving its construction and operational methods, as it strives to reduce battery costs.

Currently, the Gigafactory covers 1.9 million square feet, including 4.9 million-square-foot operational space, which represents less than 30% of what will be the biggest building on earth. With increasing automation, economies of scale, and vertical integration, Tesla plans to bring down capital investment per Wh of production. The battery cost reduction would enable the company to achieve its mission to accelerate the world’s transition of sustainable energy.

Tesla’s announcement comes following the Street’s visit to the Gigafactory for tour and a Q/A session with CEO Elon Musk and CTO JB Straubel. Since then, the company’s shares have been skyrocketing today, up 4.46% at $226.66.

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