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)

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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)

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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)

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Facebook investors OK new share class to keep Zuckerberg at helm

Facebook Inc (FB.O) shareholders approved a proposal to create a new class of non-voting shares, a move aimed at letting Chief Executive Officer Mark Zuckerberg give away his wealth without relinquishing control of the social media company he founded.The company's plan to issue two "Class C" shares for each Class A and Class B share held by shareholders, in what is effectively a 3-for-1 stock split, was approved by Facebook shareholders at the company's annual general meeting on Monday.The Class C shares will be publicly traded under a new symbol.Zuckerberg said in December that he intended to put 99 percent of his Facebook shares into a new philanthropy project focusing on human potential and equality. The creation of the Class C shares would allow Zuckerberg to sell the non-voting stock, but keep the voting Class A and Class B shares that would let him retain control of Facebook.Zuckerberg plans on running Facebook "for a very long time", the 32 year-old CEO told shareholders at a Q&A session at the AGM. Shareholders also approved the continued tenure of all the eight board members, including billionaire investor Peter Thiel, who were up for re-election. Facebook announced the plan to create the new class of non-voting shares on April 27. The approval of the plan was virtually certain since Zuckerberg controls the company. (Reporting by Anya George Tharakan in Bengaluru; Editing by Savio D'Souza)

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Scientists use climate, population changes to predict diseases

LONDON British scientists say they have developed a model that can predict outbreaks of zoonotic diseases – those such as Ebola and Zika that jump from animals to humans – based on changes in climate.Describing their model as "a major improvement in our understanding of the spread of diseases from animals to people", the researchers said it could help governments prepare for and respond to disease outbreaks, and to factor in their risk when making policies that might affect the environment."Our model can help decision-makers assess the likely impact (on zoonotic disease) of any interventions or change in national or international government policies, such as the conversion of grasslands to agricultural lands," said Kate Jones, a professor who co-led the study at University College London's genetics, evolution and environment department.The model also has the potential to look at the impact of global change on many diseases at once, she said.Around 60 to 75 percent of emerging infectious diseases are so-called "zoonotic events", where animal diseases jump into people. Bats in particular are known to carry many zoonotic viruses. The Ebola and Zika viruses, now well known, both originated in wild animals, as did many others including Rift Valley fever and Lassa fever that affect thousands already and are predicted to spread with changing environmental factors.Jones' team used the locations of 408 known Lassa fever outbreaks in West Africa between 1967 and 2012 and the changes in land use and crop yields, temperature and rainfall, behavior and access to health care. They also identified the sub-species of the multimammate rat that transmits Lassa virus to humans, to map its location against ecological factors. The model was then developed using this information along with forecasts of climate change, future population density and land-use change."Our approach successfully predicts outbreaks of individual diseases by pairing the changes in the host's distribution as the environment changes with the mechanics of how that disease spreads from animals to people," said David Redding, who co-led the study. "It allows us to calculate how often people are likely to come into contact with disease-carrying animals and their risk of the virus spilling over." The team tested their new model using Lassa fever, a disease that is endemic across West Africa and is caused by a virus passing to people from rats. Like Ebola, Lassa causes hemorrhagic fever and can be fatal. The study, published in the journal Methods in Ecology and Evolution, tested the model with Lassa and found the number of infected people will double to 406,000 by 2070 from some 195,000 due to climate change and a growing human population. (Reporting by Kate Kelland; editing by Andrew Roche)

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