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July 2018

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Inventory for the device set to be discontinued in December is limited, as Microsoft Corporation confirms to ZDNet

Microsoft Corporation’s (NASDAQ:MSFT) budget-range tablet computing device Surface 3 is set to be killed off this year, after more than a year of its initial launch in 2015.

Stocks for Microsoft Surface 3 and another device, Microsoft Band 2, were noted to be limited and it was later confirmed by a Microsoft spokesperson that the production for Surface 3 will be halted after December of this year. Microsoft has stated that above average overall reception and customer satisfaction was reported regarding the flagship Surface Pro 3’s younger cousin, but the company now feels that the time has come to bring down the curtains on this success story.

Surface 3 was launched in May last year at an opening price of $499. It features an Intel Atom processor coupled with 2GB of RAM and 64GB internal storage. The device sports a 10.8-inch 1920×1280 Full HD ClearType display and runs Windows 8.1 out of the box upgradable to Windows 10, in WiFi and 4G LTE connectivity variants. It also features 8MP rear and 3.5MP front facing camera.

As to whether Microsoft is planning a successor for Surface 3 there is no news so far, but the discontinuation of the mid-range Windows tablet could be another sign about Microsoft gearing up for a blockbuster Surface launch. A high-end Windows-based Surface Phone from the company has been due for quite some time now, and rumors have recently generated a lot of interest in such a device. Whether Microsoft really follows up that interest with the product remains to be seen.

Moreover, other reports have also indicated that Microsoft is not looking to introduce any new hardware before next year. A supposed refresh for Windows 10 – codenames Redstone 2 – is considered the biggest reason for that, though.

The Country Caller takes a look if the oil prices at $50 per barrel will further push the stock up

Last month seemed to be quite positive for investors that believed in the survival of oil giants despite the low crude environment. Events including OPEC’s informal talks in Algeria with oil producers regarding output cuts and the smashing earnings for the third quarter of fiscal 2016 (3QFY16) by Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and BP plc (ADR) (NYSE:BP) helped raise stock prices.

In the latest quarter, Shell posted a $1.4 billion profit on a current cost of supplies, significantly up from the $6.1 billion loss recorded in the same period last year. BP on the other hand, recorded a $1.6 billion replacement cost profit, up by 34% year-over-year (YoY).

Analyzing the earnings of the two energy companies, The Country Caller believes that the most critical factor to consider is the direction of oil prices. Although it remains true that no certainty can be placed regarding energy prices in the short cycle, but there are factors obstructing the runaway growth.

The mooted aims to freeze output levels by OPEC has raised high skepticism. This is majorly because, if noted, meetings to stabilize prices by the oil exporters group have mostly ended in failed outcomes. Thus, analysts hold high doubts regarding the latest tentative agreement reached in September. At present, non-OPEC members are pumping prodigious amounts of crude while exempt countries such as Libya and Nigeria have also boosted their production levels.

Currently, the oil prices hover below $50 per barrel, with West Texas Intermediate (WTI) trading at $44.45 per barrel, down 0.47%; the Brent crude  trades at $46.12 per barrel, down 0.5%. Indeed $50 per barrel is the threshold at which the US oil producers are most likely to bounce back in the game. Rig counts in the country have been in the doldrums but are gradually rising. Therefore, even if OPEC takes steps to stabilize oil prices, it is highly likely that US oil producers will counteract the positive effects, if any and make $50 the new price ceiling.

Whisper numbers for Big Lots and Fred’s quarterly financial results, before their respective announcements tomorrow

For the third quarter of fiscal year 2016 (3QFY16), Big Lots, Inc. (NYSE:BIG) and Fred’s, Inc. (NASDAQ:FRED) are expected to report their financial numbers before the market opens on Friday, December 02. Both companies have held remarkable beat trends in the past. Digging deeper into BIG and FRED’s earnings whispers suggest that both companies will beat the Street on top line whereas Big Lots will outperform on bottom line as well. We further analyze their past performances and earnings predictions below.

Big Lots

Wall Street analysts predict Big Lots to report loss per share (LPS) of two cents, maintaining the company’s LPS guidance of 1-4 cents. Also, the company reported LPS of one cent for the same period last year. On the other hand, Earningswhispers.com expects BIG to breakeven this season. Moreover, earnings are expected to decline dramatically from earnings per share (EPS) of 51 of last quarter.

Street analysts and Estimize.com also expect Big Lots to report $1.12 billion revenue for this quarter. Interestingly, the $2.26 billion company also reported $1.12 billion for the same period of FY15. Analysts expect revenue to decline about 7.1% quarter-over-quarter (QoQ) over last quarter’s $1.2 billion revenue.

Fred’s Inc.

FactSet data indicates that Wall Street predicts Fred’s to post LPS of 17 cents. In comparison, Earningswhispers.com expects LPS to clock in at 18 cents. Analysts predict loss to increase both sequentially and annually. The Mississippi-based company reported nine cents in LPS for 3QFY15 and 15 cents in LPS for 2QFY16.

Additionally, the analysts also look forward to revenue of $512.6 million, representing 5.25% year-over-year (YoY) decline. Estimize.com predicts a top line beat over Wall Street expectations this season, with its revenue forecast of $514.6 million. Moreover, the 384.79 million company reported $529.5 million revenue for the previous quarter.

Apple is expanding its horizons in order to make sure its users do not utilize third-party apps

A lot of rumors have been recently making rounds on the web, suggesting that iOS 10 is most likely to be releasing with Apple Inc.’s (NASDAQ:AAPL) new iPhone 7 in September. The same rumor mill is now churning iOS 10 to arrive with a native Smart Home app.  

MacRumors has spotted an Apple employee’s review on Amazon, which states that the iPhone manufacturer will soon release a native Smart Home app to relinquish the need of consumers to chase after third-party sources. The same employee also explained that the app would serve as a hub for all smart appliances and gadgets found within a home.

Apple is yet to officially confirm the legitimacy of this discovery. Additionally, the company hasn’t even confirmed its plans to release such an app in the first place. Thus, in the absence of both elements, we have no other choice but to slide this piece into the rumors folder.

That being said, Apple’s notion to cater to the different needs of its monstrous user-base could force the company to release such an app this year. A native Smart Home application on the iOS would make it more efficient and easier to automate household appliances and gadgets. Going through third-party apps can be frustrating and painful, as any user will tell you. Here’s hoping that Apple confirms the app’s existence in the coming months.   

Yesterday, Verizon announced that it plans to submit a second round of bid of around $3 billion to acquire Yahoo’s web assets

Verizon Communications Inc. (NYSE:VZ) announced yesterday that it is planning to enter the second round of bidding, wherein the company would offer $3 billion for acquiring the core internet business of Yahoo! Inc. (NASDAQ:YHOO).

The New York-based telecommunications company is deemed to be the leading contestant to acquire Yahoo’s web assets and met yesterday’s deadline for the second round of bidding. It is expected that Yahoo! may hold at least another round for the bids and that the offers may change by end of the third round.

According to The Wall Street Journal, Verizon signaled towards the fact that it is not interested in buying certain Yahoo! assets, such as patents and real estate, which are included in the deal. Yahoo! was recorded to have said earlier this year that it is evaluating the viable options for selling out its non-core assets, including real estate and patents. Yahoo! estimates that it could fetch nearly a billion dollars from the sale of these assets.

Besides Verizon, a private equity firm TPG is also a contender to acquire Yahoo’s web assets. The private equity firm was also expected to submit a second-round bid before time flies. Moreover, the Journal reports that no news of other contestants in the deal participated in the latest bidding round. Alongside TPG, other private equity firms Advent International, Vista Equity Partners and a group led by Quicken Loans’ founder Dan Gilbert, are other contenders who wish to acquire Yahoo!’s core internet business.

Yesterday, news emerged that Twitter Inc. (NYSE:TWTR) and Yahoo! held talks for a merger. The social media giant is itself facing managerial and operational issues and it is witnessing frequent changes in the hope that something may click. Twitter’s listing in the iOS App Store was switched from a social network app to a News App.

The industry experts believe that Twitter can be considered as a major source of news in today’s world and now merging with Yahoo! would provide it with a platform which is much needed in order to boost the operations.

The Tesla and SolarCity merger might see another risk from the new Senate investigation on solar incentives

Earlier this week, the Senate Finance Committee and the House Ways and Means Committee started investigation on whether solar companies “improperly” earned billions of dollars in incentives from the Obama administration, The Wall Street Journal reported. The lawmakers sent letters to seven key solar companies, including SolarCity Corp (NASDAQ:SCTY).

Although a SolarCity spokesman said that the matter is “fairly straightforward,” Axiom Capital analyst Gordon Johnson seems to be anxious on the issue, as he already thinks there is a “burgeoning risk” to closure of the Tesla Motors Inc. (NASDAQ:TSLA) and SolarCity merger deal. The new senate investigation on solar incentives could also derail the transaction, he noted in a report published Thursday.

Republican lawmakers believe that a 30% investment tax credit given by the Treasury Department and the Internal Revenue Service might not be the right calculation on every project, leading to a debate on the solar product’s fair market value. In its 2015 Annual Report, SolarCity said that if the Department of Justice sees any misrepresentation, it could bring a civil action to recover amounts it believes were improperly paid.

Additionally, the company noted in its recent SEC filing that if the amounts are said to be “too high of a fair market value,” there can be a significant negative impact on its financials and future prospects. The American solar installer received $501 million in incentives as of December 31, 2015. Thus, even a downward adjustment of 5% would make SolarCity liable to repay as much as $25 million to investors.

Mr. Johnson already believes that Tesla shareholders are too enthusiastic about the SolarCity merger and that the EV maker is not willing to provide more funds to its sister company. He sees the latest investigation as “another risk to the Tesla/SolarCity deal closing,” which is expected to take place by the end of this year after shareholder vote out and the SEC approval. While Tesla shares closed up 0.18% to $196.41 Thursday, SolarCity shares closed down 0.99% at $16.89.

The sales continue to decline in the wake of Nintendo’s upcoming NX console

Nintendo Co. Ltd. (OTCMKTS:NTDOY) released its first quarter of fiscal year 2017 earnings today. It reported results for the 3-month ended June 30, 2016. The Japanese console giant has reported the biggest first quarter loss in five years.

Compared to last year’s $855 million, net sales declined 31% to $587 million. Nintendo also reported an operating loss of $48 million, quite worse than the $10 million loss it reported for the year-ago period. The primary reason for the lower stats is a decline in hardware sales of Nintendo’s 3DS and Wii U home consoles.

The earnings release reveals that 3DS handheld sold 940,000 units worldwide through the quarter, reflecting 7% year-on-year decline. As for the Wii U, the console saw a much more worse 53% decline to 220,000 sold units for the period. The significant decline in Wii U hardware sales is due, in part, to Nintendo’s upcoming NX console. Nintendo has not shared any details about the system, which is scheduled to arrive in March 2017. Four years after its launch, the Wii U has managed to sell a little over 13 million consoles worldwide.

Software sales of 3DS showed improvement as they rose 7% from the same quarter last year, selling 8.47 million units. Wii U sales, on the other hand, rose 3% to 4.68 million units.

Overall, it seems that 3DS is still doing better than Wii U. The interest in Wii U will continue to decline as we move closer to NX’s launch. Nintendo had previously shared its intention to produce lesser units of Wii U as the Japanese console giant expects to sell only 800,000 units this year.

The equity firm still maintains a bearish stance on Chesapeake

Chesapeake Energy Corporation (NYSE:CHK) reported its first quarter earnings after markets closed Thursday. The oil-and-gas production and exploration company posted weak numbers, as revenue fell below the 2-billion mark. Furthermore, the company failed to derive profits for shareholders as it reported an overall net loss per share.

UBS analyst William Featherston highlighted key takeaways from Chesapeake’s earnings call. Despite experiencing a weak quarter, the company maintained its full year guidance which said that it expects 605-635 million barrels of oil equivalents per day (MBoed), suggesting no growth to its 2015 pro-forma base of 623 MBoed. The company also guided for a capital expenditure of $1.3-1.8 billion, suggesting a 57% year-over-year decline.

Total cash balance dropped to $15.5 million from the $2.1 billion it reported for the year-ago period, showing a deteriorating liquidity scenario. The company has recently sold off assets worth $880 million, proceeds of which it will receive by the third quarter. Chesapeake now models costs cuts of about 5% for LOE, and expects transport cost to decline by 2%.

The earnings report says the company earned revenue of $1.95 billion for the quarter, missing the consensus estimate of $2.55 billion by $600 million. Net loss per share of 10 cents was in line with the consensus. Despite posting a weak quarter, the analyst believes that cost cuts and increased volumes will work in Chesapeake’s favor; based on this view, he has raised his 2017 cash flow per share estimate to $1.30 from $1.10. Mr. Featherston reiterated his Sell rating on Chesapeake but raised his price target from $0.50 to $4.

Of the 33 analysts currently covering the stock, 20 recommend a Hold, while 11 remain bullish on it. The 12-month price target on the stock currently stands at $4.23, reflecting 25.92% downside potential over the stock’s close May 5.

 

Netflix starts localization process in Poland, announces more local content and partnership with T-Mobile

Last month, TheCountryCaller reported Netflix, Inc. (NASDAQ:NFLX) is starting a localization process in Poland and Turkey this year, according to IHS Technology senior analyst, Irina Kornilova. Today, the world’s largest online TV network announced the localization in Poland, what it calls “a truly Polish service.”

Broadband TV News reported that the company also has made T-Mobile, the nation’s largest telecom operator, its first local partner in the country. It uses a completely localized user interface from today, September 20, with more than 80% of the content library that is either subtitled or dubbed in Polish language.

Netflix collaborated with T-Mobile for consumer promotion purpose that would enable its subscribers to pay for their monthly subscriptions via their T-Mobile accounts last this year. The publication quotes Netflix CEO Reed Hasting, “We always knew the Polish people had a big appetite for great entertainment. Now we know it and we’re delighted to offer a more localized Netflix experience in Poland that will continue to grow with great TV shows and movies from here as well as around the world.”

Netflix also plans to offer more local content to its users in the country, as it already provides a few Polish titles. Regarding the timeline for the local content releases, Mr. Hasting said that they will be developed and released within three years.

The company introduced its service in Poland at the beginning of this year via the global launch. It currently faces two local SVoD services and HBO GO. It will also localize its service in Turkey soon.

Ms. Kornilova expects the localization to dramatically boost the subscriber number in Central Europe; though, it might take some time. She expects the localization to continue over the next years and expects paid-subscribers new markets to grow by 133% and 62% in 2017 and 2018, respectively.V

AT&T Inc. (T) stock among Warren Buffet list of top ten stocks to invest in during 2016

AT&T Inc. (NYSE:T) stock is one of the best options to invest in amid market downturn. The company has managed to gain market value by 6.74% year-to-date (YTD) against a drop in Dow Jones and S&P 500 Index by 5.70% and 6% respectively. Moreover, AT&T management has recently announced a 2.1% increase in annual dividends, which leads to a total 5.3% return in the form of dividends annually. Although the increase is minimal but it is higher than the current inflation rate.

AT&T’s stock is also declared among top ten stocks to invest in for the year 2016 by Warren Buffet. Park National has also increased its stake in AT&T by 2.2% recently, which leads to total shareholding of 383,739 shares worth $13,204,000. Conversely, Janus Capital Management has reduced its shareholding in AT&T by 26.6% according to a recent filing with Security and Exchange Commission (SEC). However, Janus still holds 2,546,616 shares in AT&T, which are worth $82,968,000.

There is recent speculation about AT&T that it is going to make a big move by entering into media and content creation as the company is one of the bidders of Yahoo! Inc. (NASDAQ:YHOO) legacy business. However, it is highly implausible for the company to make such move as AT&T is way too big for acquiring Yahoo!. Although Yahoo! has huge customer base and is one of the most visited website, it would only add up 1% to AT&T’s EBITDA if the acquisition takes place. Any such acquisition will not be much profitable for AT&T’s business, so the speculations are unlikely to turn into reality.

DA Davidson initiated the coverage of AT&T’s stock with a buy rating on February 4.  According to data gathered by Factset, nine analysts recommend a strong buy for AT&T’s stock, seven analysts have a buy opinion, 14 analysts have given a hold rating, two have suggested an underperform rating, whereas, one has given a sell rating for company’s stock.

 AT&T’s stock has a 12-month consensus price target of $38.38. The company’s stock is trading at $36.63 down by 0.27% as of 8:00AM EST on February 24.