Samsung Electronics set for best quarter in over two years on second-quarter smartphone boost

SEOUL Tech giant Samsung Electronics Co Ltd is poised to issue guidance for its best quarterly profit in more than two years, propelled by a surge in mobile earnings on the back of robust sales of its flagship Galaxy S7 smartphones. The South Korean giant will disclose its estimates for second-quarter earnings on Thursday, with analysts predicting a strong mobile division contributed to a 13 percent jump in operating profit from the same period a year earlier. The average forecast from a Thomson Reuters survey of 16 analysts tips Samsung to report April-June operating profit of 7.8 trillion won ($6.8 billion), the highest since an 8.5 trillion won profit in January-March of 2014. The mobile division of the world's top maker of smartphones and memory chips was likely its top earner for the second straight quarter with a 4.3 trillion won profit, according to the survey. Samsung surprised many with better-than-expected first-quarter earnings, and issued guidance for a further pickup in April-June."Galaxy S7 sales are better than expected in the first half, and the semiconductor business is also outperforming rivals," said KTB Asset Management's Lee Jin-woo. The fund manager estimated the firm's quarterly operating profit would also stay strong in both the third and fourth quarters at between 7 trillion won and 8 trillion won in each. Samsung's smartphone business had been squeezed before the start of this year between Apple Inc, at the high end of the market, and Chinese rivals like Huawei Technologies [HWT.UL] in the budget segment. But the Galaxy S7 has provided a catalyst for the earnings rebound, likely putting the mobile business on track to record its first annual profit growth in three years.Some analysts say Samsung shipped around 16 million Galaxy S7s in April-June, with a higher-priced curved-screen version outselling its flat-screen counterpart and boosting margins. Lackluster sales of offerings from rivals such as Apple and LG Electronics also helped reduced marketing expenses, they said. "While operating profit margins for the mobile phone business will decline in the third and fourth quarters as the Galaxy S7 effect fades, operating profit will continue to grow on an annual basis," Korea Investment & Securities said in a report. As its smartphones thrive, Samsung's chip business - last year's key profit driver - probably saw quarterly profit sink to its lowest in nearly two years due to weak demand from makers of other smartphones and personal computers. But signs of some price recovery for DRAM chips starting last month and Samsung's dominance in the premium solid-state disc drive market with its 3D NAND chip production technology suggest a pickup in coming months, analysts said. (Reporting by Se Young Lee; Editing by Tony Munroe and Kenneth Maxwell) Read more

Solar plane lands in Spain after three-day Atlantic crossing

SEVILLE, Spain An airplane powered solely by the sun landed safely in Seville in Spain early on Thursday after an almost three-day flight across the Atlantic from New York in one of the longest legs of the first ever fuel-less flight around the world.The single-seat Solar Impulse 2 touched down shortly after 7.30 a.m. local time in Seville after leaving John F. Kennedy International Airport at about 2.30 a.m. EDT on June 20.The flight of just over 71 hours was the 15th leg of the round-the-world journey by the plane piloted in turns by Swiss aviators Bertrand Piccard and Andre Borschberg. "Oh-la-la, absolutely perfect," Piccard said after landing, thanking his engineering crew for their efforts. With a cruising speed of around 70 kilometers an hour (43 miles per hour), similar to an average car, the plane has more than 17,0000 solar cells built in to wings with a span bigger than that of a Boeing 747. (Reporting by Marcelo Pozo; Writing by Paul Day; Editing by Gopakumar Warrier) Read more

Behind Tesla carnage, signs of support for Musk's SolarCity deal

Some of Tesla Motor Inc's (TSLA.O) biggest investors have signaled support for CEO Elon Musk's plan to buy solar power company SolarCity Corp (SCTY.O), although the electric car maker's stock cratered on Wednesday, lopping more than the $2.8 billion value of the proposed deal off Tesla's market capitalization. “It’s a natural evolution of their mission to transform transportation into a sustainable business,” said Joe Dennison, a portfolio manager of Zevenbergen Capital Investments, which has about 600,000 Tesla shares, or about 0.4 percent of shares outstanding. It is still early in the process, he said, but "We expect it to go through and believe that most investors who actually own the stock understand management's long-term vision for the company."That was not the market's broad reaction, sending Tesla's shares down more than 10 percent, and taking more than $3 billion off its market value, which now stands around $28.7 billion. That was a blow to Musk, who is chief executive of Tesla, chair of SolarCity and the biggest shareholder in both companies. He is also the CEO of rocket-maker SpaceX.He and Tesla management risk being distracted from rolling out the new Model 3 sedan, a mass-market electric vehicle key to the success of the young firm, analysts said, questioning whether merging two companies which both need substantial cash was a good idea.The audacious entrepreneur envisions a one-stop shop for clean-energy fans, who could buy an electric car, home solar system and battery backup in a single visit. Some argued the two firms cater to different groups of customers, with little crossover.Shares of the much smaller SolarCity rose more than 3 percent, valuing the U.S. market leader in residential rooftop solar panels at $2.15 billion.PLANS IN THE PIPELINE In a hastily arranged call with investors and Wall Street analysts early on Wednesday, where Tesla executives defended the deal, Musk said institutional shareholders had some idea of the plan. He had not disclosed the deal, he said, but over the years, "this idea has been bandied about with some of our largest shareholders, institutional shareholders. Yeah, there have been discussions." The manager of the second largest mutual fund investor in Tesla, the $12 billion Fidelity OTC Portfolio, which is also the largest institutional holder of SolarCity, praised a tie-up in comments earlier this year."We remain fans not just of Tesla products, but of the concepts and potential future partnerships behind the company. We foresee fruitful synergies between say, Tesla and SolarCity – or any company that can benefit from superior battery technology," Gavin Baker, who runs the Fidelity OTC fund, said in his first-quarter commentary for investors. It owns 2.1 percent of shares.Overall, 45 percent of Tesla shareholders also hold SolarCity stock, a person familiar with the matter said. Baker and Will Danoff, who runs the $100 billion-plus Fidelity Contrafund (FCNTX.O), the largest mutual fund investor in Tesla with 3.5 percent of stock, have both told Reuters in interviews that they tend to give more leeway to founder-run companies which they believe are still in the early stages of growth. Musk, a founder of Tesla and SolarCity who owns about a fifth of each, will recuse himself from board and shareholder votes, leaving the fate of the deal in the hands of outside investors, led by major fund companies such as Fidelity Investments.Musk himself said that Tesla could be a trillion-dollar company one day, despite its current market value being less than 3 percent of that figure."I have no doubt about this - zero," Musk said on the call with analysts and investors before markets opened on Wednesday. "We should have done it sooner."LOST GOLDEN TOUCH?The quiet support was drowned out by criticism as the stock fell. "This deal feels like (Musk) has lost his Midas touch. I also feel like Musk is trying to do too much," said well-known investor Jeffrey Gundlach, chief executive at DoubleLine Capital, which does not hold Tesla shares.Investors who short Tesla, betting that shares will fall, pointed to the conflict of interest and raised financial concerns about uniting two money-losing companies which both regularly raise cash to support their expansion."When a company's executives misunderstand modern corporate finance and technology strategy, they can make profound miscalculations and errors of judgment," Salome Gvaramia, chief operating officer of Devonshire Capital, which has a short position in Tesla, said in a statement.SolarCity shares have fallen more than 50 percent this year in a highly competitive market, fanning criticism that a Tesla deal was meant to save SolarCity.Some analysts noted that SpaceX has bought SolarCity bonds, giving it and Musk incentive to support SolarCity.Short-seller Jim Chanos of Kynikos Associates blasted Tesla's proposed acquisition of SolarCity, describing it in a statement as a "brazen" bailout" and "shameful example of corporate governance at its worst."Musk said SolarCity would post positive cash flow in the next three to six months and would not have a material impact on Tesla's future cash needs or expectation to be cash-flow positive by year-end. Costs for both companies would go down significantly after the merger, he said, without giving specifics.Share lending data suggested short sellers were increasing their bets against both companies. Interest rates to borrow Tesla shares rose to 5 percent on Wednesday from 1.5 percent early in the day, according to S3 Partners, a financial analytics firm. Hardly any SolarCity shares were available for borrowing. (Additional reporting by Jennifer Ablan, Supantha Mukherjee, Narottam Medhora,Liana Baker, Paul Lienert, Michael Flaherty, Alexandria Sage, Tim McLaughlin, Ross Kerber, Rishika Sadam, Nichola Groom and Noel Randewich; Writing by Peter Henderson; Editing by Anil D'Silva, Lisa Von Ahn and Bill Rigby) Read more

Sun-powered phone charger gives migrants in Greece free electricity

LESBOS, Greece For refugees and migrants stuck in Greece, a smartphone is a lifeline -- as long as its battery lasts.But access to electricity can be hard to find in overcrowded camps, nor is it always free in cafes where young and old crowd together over a socket, waiting anxiously to phone home.A team of students from Edinburgh University is hoping to change that, having designed a mobile phone charging station powered only by the sun -- something Greece has plenty of.They have installed two units in camps, each configured to generate electricity for 12 plugs an hour using solar energy alone, providing free power to as many as 240 people per unit each day.The idea was borne out of a visit last summer of one of the founders, 20-year-old Alexandros Angelopoulos, to the island of Samos, one of the entry points into Europe for nearly a million people fleeing wars and poverty in the Middle East and beyond.Hundreds arrived on its shores each day, soaked and exhausted from clinging onto rubber boats from Turkey. Relieved to have made it, they snapped selfies. Others logged on to messaging applications and Google Maps to plan their onward journey to northern Europe. "People started asking for my phone to call family and to use the internet," Angelopoulos said. Often, they were stranded at the port sharing one plug."We just wanted to make a positive contribution to local communities through renewable energy," said co-founder Samuel Kellerhals, 21.The first two units of Project Elpis -- which means "hope" in Greek -- were designed and built with the help of Greek solar technology company Entec. The pair said they had to overcome red tape along the way. "Initially it was quite difficult. Everything in Greece is quite bureaucratic," Angelopoulos said. Now, another three units are in the works with money raised through crowdfunding, a method of generating funds from a large number of people via the internet. Its founders hope to reach as many of the dozens of camps around Greece as possible. At the Kara Tepe camp on Lesbos where the first unit was installed, authorities and residents are thrilled. "I told them -- you should've brought it yesterday and not one, but four," said Stavros Miroyannis, who manages the camp for families which is run by the local municipality."They've promised me three more and I'm expecting them with great pleasure."Miroyannis hopes to one day power the entire site using solar energy. Solar panels have already replaced street lamps."This is a gift from God," he said, pointing to the blazing sun. (Editing by Catherine Evans) Read more

Facebook board seeks curb in Zuckerberg control in event of founder's departure

Facebook Inc's board has proposed removing Mark Zuckerberg's majority voting control in the event of the social media giant's chief executive and founder deciding to exit management at some point in future.In a proxy filing on Thursday with the U.S. Securities and Exchange Commission, Facebook's board said it will ask shareholders to vote on a proposal that would convert Zuckerberg's Class B shares into Class A shares if he is no longer in a leadership position. As of June 2, Zuckerberg beneficially owned about 4 million Class A shares and about 419 million Class B shares, collectively representing about 53.8 percent of total outstanding voting power and 14.8 percent of total outstanding economic interests. The proposed move - to be voted on at Facebook's annual general meeting on June 20 - is designed to make sure a future Facebook chief's management powers aren't limited, the board said. "These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company," the board said in the filing. ( Under current provisions, Zuckerberg is allowed to hold Class B shares and exercise majority voting control even if leaves the company. Zuckerberg would also be allowed to pass his Class B shares, and possibly his majority voting control, to descendants after his death. (Reporting by Arathy S Nair in Bengaluru; Editing by Kenneth Maxwell) Read more

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