December 2017


Elon Musk assures disgruntled customers demanding retrofits for new technologies

Unlike traditional car manufacturers, Tesla Motors Inc. (NASDAQ:TSLA) launches new model vehicles everywhere, but it keeps bringing in changing to its existing models, Model S and Model X, to ensure they remain as good as new. Though, some owners complain about the lack of retrofits for the new technologies.

Following the launch of the new self-driving hardware suite last October, owners of vehicles with the first-generation hardware suite really wanted the technology through a retrofit. To address the problem, Tesla CEO Elon Musk responded to a follower on Twitter that the company “will never stop innovating” and will continuously roll out “major revision every 12 to 18 months.”

@dtweiseth Tesla will never stop innovating. People are buying the wrong car if they expect this. There will be major revs every 12 to 18 months.

— Elon Musk (@elonmusk) January 22, 2017

He added that consumers looking for vehicles that update on annual basis are looking for the “wrong car” with Tesla. The automaker has brought several major updates to the Model S since its launch in 2012, including battery packs options, dual motors, design refresh, first-generation Autopilot, and Ludicrous mode,.

He also said that the company would require “stripping down the entire car and replacing 300+ parts” to install a retrofit for the self-driving hardware into the older Tesla cars. Thus, it seems like the company will only keep improving the software with existing hardware and autonomous driving data.

While it would be possible to install the triple front-facing cameras, but the five other cameras around the vehicle and along with an ultrasonic sensor and new supercomputer would be a big headache for the company.

If the company will keep introducing new major updates, such as the end of unlimited and free Supercharging, and the recently launched 100D option, more customers will get wary of ordering a Tesla car, fearing that they might miss out on the upcoming technology. Yet, Tesla plans to keep introducing new features and follow each other to maintain sales.

Macro conditions may not be too bad for payment processors, but competing against Visa and MasterCard definitely could be

Bank of America/Merrill Lynch recently hosted an investor meeting with the CEO and CFO of American Express Company (NYSE:AXP). The research firm reiterated its an Underperform rating on the stock, as it believes that struggle for the company is inevitable in the coming quarter as competition from two giants, namely Visa and MasterCard, shows no sign of ceasing.

There wasn’t any news in the investors meeting to be given attention to, but American Express seems confident about several growth opportunities, that will allow it to replace Costco business and deliver perfectly on its financial targets. Without a doubt, the competition remains strong for its core business, but American Express may still be underestimating the degree to which Visa and MasterCard are willing to gain more share from the former. The co-brand segment remains highly competitive, but American Express believes that it can drive better customer engagement and provide attractive returns to shareholders in core products.

American Express is of the opinion that its proprietary products and brand still resonates with its core strategy and customers. It also believes that it can penetrate in credit growth, mainly driving income from fees. At the same time, the commercial card competition is intense and migrating away from large corporate segments, where American Express has a 63% share in the Fortune 500.

MasterCard and Visa operate on a broader network when dealing with large corporate clients and also where competition is intense. However, American Express believes that there is significant growth potential in small business and middle markets, where competition is not that intense and it can leverage its data and reporting.

According to BAML, given the pending sale of Costco portfolio and lower risk-weighted asset base, the market may still be optimistic over capital returns from American Express. With CCAR result due in the coming weeks, investors are quite focused on capital returns, more than anything right now. BAML expects the American Express to be on the higher spectrum by then.

Analysts on Bloomberg are slightly bullish on the stock. Out of 34 analysts, eight suggest a Buy, 21 recommend a Hold, while only five suggest a Sell.

The Country Caller explains Chevron’s journey through a troublesome period

Chevron Corporation (NYSE:CVX) year-to-date (YTD) stock performance has been impressive, i.e. a return of 11.5%. In the past five days of trading, stock has declined by 1.77%. The recent sell-off has been on the back of its poor results. We believe the stock could slide down further as the company faces off some real trouble.

For Q2, Chevron reported net loss amounting to $1.47 billion, or net loss of $0.78 per share. This was considerably lower than a net profit of $571 million or profit of $0.30 per share in the same period a year ago. This was third consecutive quarterly loss reported by the company.

The reason behind company’s poor performance could be attributed to lower commodity prices as compared to a year ago, which are out of company’s control, but that’s not the sole concerning factor for the investors.

Its production in the second quarter declined by 2.6% on year-over-year (YoY) basis, and amounted to 2.528 million barrels of oil equivalent per day (MBOED). It was also lower than analysts’ estimates of 2.618 MBOED.

Not only its upstream performance was poor but also downstream – or in other words, refining segment – also remained subdued. On YoY basis, the upstream losses continued to hamper company’s performance and increased by 11%. This was mainly attributed to decline of 37.8% in company’s realized oil prices.

In an era of lower oil prices, downstream segment provides substantial support to company’s overall performance. Its revenues from downstream segment declined from $2.956 billion in Q1 2015 to $1.278 billion in Q2 this year. This was mainly due to lower margins on refined products.

The outlook for crude prices does not seem to be appealing either. The supply disruptions from Nigeria and Libya are set to resume, higher production from Iran, high inventory levels of gasoline, maintenance of refineries, and higher rig count data from the US continue to put pressure on oil prices. Hence, the future performance appears no way near improvement.

Whether it is commodity prices, performance from downstream segment, or production figures, all pose concerns to investors.

Tesla CEO Elon Musk confirms that Mobileye breakup will have no material effect on the Autopilot plans

Yesterday, we reported that Mobileye NV (NYSE:MBLY) announced that it will not renew its existing partnership with Tesla Motors Inc (NASDAQ:TSLA), as it will only provide the existing EyeQ3 processor used in its vehicles. Since the automaker expects to reach full autonomy with a few years, it will move away from the Mobileye’s technology.

The break of Tesla with Mobileye spurred speculation that the automaker might delay its plan to roll out the fully autonomous driving system. Though, Electrek reported Tesla chief executive Elon Musk has confirmed that the breakup with Mobileye will not affect the Autopilot time line and the automaker will be focusing on more integrated technology.

Mr. Musk said: “MobilEye’s ability to evolve its technology is unfortunately negatively affected by having to support hundreds of models from legacy auto companies, resulting in a very high engineering drag coefficient.”

He added that there will be no significant impact on the company’s plans and it is “laser-focused” to achieve complete self-driving technology on an integrated platform with far more safety than a manual driven vehicle.

Mobileye Chairman and CTO, Amnon Shashua said that his company will continue shipping the chip in the “near future.” However, the tech startup’s next-generation chips, EyeQ4 and EyeQ5, which are developed for more advanced autonomous systems will not be used in the Tesla vehicles.  

Tesla and Mobileye are in a partnership since the automaker started working on the Autopilot program. The short-lived relationship has seen complications, as George Hotz told Bloomberg last December that Mr. Musk wants him to replace Mobileye and build an autonomous driving system. Though, Tesla quickly published a statement that they will continue using Mobileye’s technology.

Nevertheless, the automaker had been quietly building a team of chipmakers to develop the second generation Autopilot under the leadership of Kim Keller, the legendary, former Apple chip architect. Now it appears the complications between the two companies have now increased, as they have different view on implementation of the technology.

Q3 earnings predictions for Diplomat Pharmacy and Facebook before their quarterly earnings announcement later today

After the closing bell on November 2, Diplomat Pharmacy Inc. (NYSE:DPLO) and Facebook Inc. (NASDAQ:FB) will release their financial data for the third quarter of fiscal year 2016 (Q3FY16). Both companies have impressed investors in the past with exceptional beat trends. Whispers suggest that Facebook will beat the Street on top and bottom line, whereas Diplomat Pharmacy will meet the Street on its top line expectations only.

Diplomat Pharmacy

Data from FactSet suggests that Diplomat Pharmacy has consensus earnings per share (EPS) estimate for 3QFY16 of 24 cents. EPS is expected to increase by just one cent on sequential basis, as it reported 23 cents for the last quarter. However, EPS is expected to decline 7.69% year-over-year (YoY), as it had 26 cents EPS in 3QFY15.

Street analysts have also given $1.26 billion in revenue forecast for Diplomat Pharmacy. expects $1.53 billion company to meet the Street on top line, and report an increase in revenue of 33.06% YoY. The company reported $946.91 million for the same quarter a year ago, while it announced $1.1 billion last quarter.


Street analysts forecast Facebook to report $0.98 in third quarter EPS. anticipates higher profits per share of $1.03, implying that social networking site will beat the Street on bottom line by about five cents. Earnings for the season are also expected to grow 71.93% YoY, since it announced profits of 57 cents per share in Q3FY15. For the previous quarter, it reported 71 cents in EPS. predicts Facebook to report $7.03 billion revenue this quarter. If it does, Facebook will miss out on Street revenue estimate of $6.92 billion. Street analysts suggest that revenue will rise 7.57% quarter-over-quarter (QoQ) as it reported $6.47 billion for the previous season. In its third quarter earnings call for last year, it announced revenue of $4.5 billion. This means that Street analysts expect revenue to rise 53.84% YoY.

Aimed to further discus Air Force One project, Boeing’s chief Dennis Muilburg is expected to meet Donald Trump today

According to sources familiar with the matter, Boeing Co’s (NYSE:BA) chief executive officer Dennis Muilenburg is expected to meet President-elect Donald Trump today to discuss future prospects of the Air Force One project. This would be the second time the company’s chief would meet with Trump, as earlier in December, a similar meeting was conducted.

Further details of the meeting agenda were not discussed. However, it is clear that Donald Trump might cut down the project cost and might renegotiate terms of the next-generation series of Air Force One aircraft project. Earlier in December, Trump criticized the project by saying that the costs are out of control, based on which the project should be cancelled.

Later on, the President-elect also conducted meeting with the company officials, in which Boeing reportedly affirmed him to drive the project cost down and that the cost area should not be out of control. Along with Boeing, Trump also criticized Lockheed Martin Corporation’s (NYSE:LMT) F-35 project, one of the US government’s costliest project, by saying that the company would have to bring the cost down.

As part of the meeting outcome and with the aim to win Trump confidence, Boeing’s chief vowed that the company would deliver a newer version of Air Force One with cost under $4 billion. However, analysts related to the industry are of the opinion that the company will now have a narrow window to keep Trump’s confidence as it will have to meet the delivery timelines to avoid any type of cost overruns.

Along with reducing the cost of the project, Mr. Mullinburg was also of the opinion that the company would work closely with the government to keep the progress clear with the officials and to make sure that they reduce the project costs. However, industry analysts fears that if the company is unable to do so, Trump might look at other aircraft manufacturers to build the next-generation Air Force One aircraft

Microsoft’s race to rack up 1 billion Windows 10 devices before 2018 has landed the company in hot water

Microsoft Corporation (NASDAQ:MSFT) has been handed defeat in a $10,000 lawsuit filed by the owner of a travel agency in Sausalito, California, when she claimed that Windows 7 on her business computer had upgraded to Windows 10 without her authorization or any prior notice.

Teri Goldstein filed a complaint that a forced Windows 10 update on her computer at the travel agency in August 2015, caused her company to bear losses of around $17,000 as the computer only “limped along” in the peak booking season of holidays when the demand is through the roof. Miss. Goldstein stated that the forced update caused her company to fall behind because the files and customer information remained inaccessible, and that customer service from Microsoft was unable to lend her a hand in those issues when she contacted them.

The kind of importance that Microsoft gave to this issues is reflected in the fact that they didn’t even hire a lawyer to represent the company in the small claims court; an employee of a retail store stood in Microsoft’s corner instead.

This is not even the first time that users have complained about Microsoft forcefully updating their computers with Windows 10, as several social media sites have been awash with stories of unauthorized upgrades, and at times, they have led to disabled functionalities and bricked devices even. The sheer deception and frustration that some users have faced in the issue is reflected in Industry expert Paul Thurrott’s experience, who said that clicking on the red X button, usually a close button for popup, resulted in his apparent consent to the upgrade on his computer.

Microsoft’s tactics – while dirty at times – have resulted in Windows 10 being the most swiftly adapted operating system ever from Microsoft. Over 300 million users are now running the “recommended update” Windows 10, and more continue to move to the latest OS as they see the merits in doing so. Forcing users to make the move towards Windows 10 doesn’t bode well at all, and lawsuits like the one filed by Miss Goldstein, while don’t set the company back a long way when it comes to finances, have a major negative impact when it comes to customer services and public relations.

Apple Music is reportedly set for unveiling in its new colors at the Worldwide Developers Conference in June

Apple Inc. (NASDAQ:AAPL) is overhauling the design on its Apple Music streaming service a year after its initial launch, according to a report published by Bloomberg.

Bloomberg states in its report, citing unnamed sources, that Apple Music has not set the world alight during the first year of its operation, mainly due to the departure of executives from the company responsible for making Apple Music work. Apple is reported to be streamlining the service to allow for more intuitive use, and accompanying the changes with massive marketing efforts to boost interest in the service.

Apple hopes to have the new iteration of its music streaming and download service up in time for the Worldwide Developers Conference, scheduled to be held in San Francisco from June 13 to June 17.

Apple Music currently charges $10 per month for its streaming service, but its stock has declined recently among music fans, and unfortunately for Apple Music, Spotify’s stock has been on a continuous rise over the same period.

Top Apple Executives like Design Chief Jony Ive, Senior VP of Internet Services Eddy Cue, and the entertainment industry icon Jimmy Iovine, have all been at loggerheads over the Apple Music conundrum, and the company hopes that the design overhaul will spark a renewed interest in the product.

Apple has been aggressively working to improve on almost every area of operation and CEO Tim Cook is said to be personally involved in a lot of ideas being tossed around to make things better. Following the dismal financial showing recently, by Apple’s standards we might add, the company is reportedly tensed about its products and the direction in which it is heading. This reeks of doubt that many would not associate with Apple. An effort to make Apple Music top in its sector could be the first step that the company takes in the right direction.

Intel Corporation’s (NASDAQ:INTC) earnings report delivered more than mixed results with new information regarding the company’s restructuring towards growth areas

Intel Corporation (NASDAQ:INTC) reported earning beats yesterday despite missing on revenue and also gave light guidance for sales. The earnings report also stated INTC has plans to significantly cut work force and streamline its business towards the most profitable segments, creating savings and broadening the company’s margins. With this, comes an increase in investments to execute the shift along with anticipation of certain hurdles the company will face in its transition.

To start off with Intel’s first quarter results, the company reported $13.8 billion in revenue, 8% growth year over year, missing expectations for $14.16 billion. Earnings per share of $0.54 however, topped consensus by $0.07. Intel’s outlook is lighter than expected and a downward revision from prior guidance. The company is projecting revenue in the range of $13-14 billion which is below the $14.16 billion consensus based on an expected 5.3% growth.

Timed with the earnings report is some big news from Intel; the company is cutting 12 thousand jobs or 11% of its workforce globally with the objective of streamlining the business as they “revaluate” their various programs. However, it seems that these departures are directed at streamlining Intel’s business and create cost saving as the company gears up investments in growth segments which it hopes will drive revenue growth and increase the profitability of its mobile and PC businesses. The job cuts are expected to create $1.4 billion in savings annually by the middle of next year and are expected to be executed within the next 2 months.

Intel recently hired one of Qualcomm’s top executives who spearheaded the company’s market dominance in mobile. The hire of an ex-Qualcomm top executive to the Number 2 position at Intel signals that massive change is afoot in terms of a shakeup of Intel policies with many of the company’s old talent on the way or already walking out of the doors as a result.


If you own an Apple device, update to 9.3.3 as soon as possible

Apple Inc. (NASDAQ: AAPL) recently rolled out the 9.3.3 update for iOS devices and urged users to patch up to the latest software because it contains a bunch of security updates. It has just been discovered that Apple’s iOS has a security flaw, which lets hackers steal user passwords by simply sending a text message. According to the company, the recent hack is a very serious security issue for which it is recommended to update as soon as possible.

The new hack directly targets the ImageIO, which is a programming interface that can read and write image data. This means when a hacker sends a multimedia message with the malicious code attached, the code starts executing it as soon the user receives it. Users can also be affected by the hack with malicious emails or webpages, but they would have to click on a link or webpage to initiate the hack.

Once a user device is infected, hackers can get access to a part of the computer’s main memory through which sensitive information, such as credentials and passwords, can be leaked. The hack currently affects iPhones running 9.3.2, Mac OS X El Capitan, tvOS and WatchOS. The recent Apple hack is very similar to Stagefright, which affected Alphabet Inc. (NASDAQ: GOOG) Google Android devices in a similar way. Stagefright was worse for Android users as the vulnerability remained unpatched for a long time and hackers had more access to affected devices.

The new update also fixes the Facetime flaw, which was discovered by a Salesforce security engineer that lets snoops listen to Facetime calls. One reason for the popularity of Apple devices is the company’s ability to send out security fixes in a timely manner. It regularly rolls out new updates to improve the devices’ performance and enhance the security capabilities.