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EA’s ‘Apex Legends’ tops ‘Fortnite’ record with 25 million signups

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(Reuters) – Shares of Electronic Arts Inc jumped 8 percent on Tuesday after the videogame maker said 25 million players signed up for its new battle royal game “Apex Legends”.

An undated screengrab from the EA game “Apex Legends”. REUTERS/EA/Handout

EA is hoping to reproduce the success of Epic Games’ “Fortnite”, whose blending of “The Hunger Games” and “Minecraft” has been a global hit with teenagers and older gamers over the past two years.

EA disclosed the new number on Monday on Twitter bit.ly/2I3HaHw. “Apex Legends” signed up 10 million players within three days of its launch, EA said last week, a milestone that Fortnite had taken two weeks to reach.

As of Friday, the game was the most viewed on gaming live-streaming network Twitch.

“(Electronic Arts’) topsy-turvey CY19 took a decidedly positive turn last Friday when they announced “Apex Legends”,” Bernstein analyst Matt Romariz said, raising his price target on the stock by $29 to $120 – well above the median Wall Street target of $95.

“Apex Legends’ stunning success should also greatly reduce the frustration with management sometimes expressed by investors. Apex Legends demonstrates a brave innovation,” Romariz said, adding that “Fortnite” took three months to reach 30 million users.

The news comes almost a week after the company lowered its yearly revenue projections following weak sales of its “Battlefield V” title, that had sent its stock plunging 18 percent.

After a 9.6 percent surge on intraday on Monday, the stock ended slightly lower at $97.24.

Rival Activision Blizzard Inc was up nearly 1 percent ahead of its quarterly results, which are due after the bell.

(This story was refiled to correct to Apex Legends from Apex Legend in the analyst quote in paragraph 6)

Reporting by Akanksha Rana in Bengaluru; Editing by Saumyadeb Chakrabarty



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Kraft Heinz forecasts gloomy 2019, writes down value of iconic brands

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(Reuters) – Shares of Kraft Heinz Co slumped 20 percent on Thursday after the food company posted a quarterly loss, disclosed an SEC investigation and wrote down the value of its Kraft and Oscar Mayer brands as it highlighted the tough environment for the packaged food industry.

FILE PHOTO – Bottles of Heinz tomato ketchup of U.S. food company Kraft Heinz are offered at a supermarket of Swiss retail group Coop in Zumikon, Switzerland December 13, 2016. REUTERS/Arnd Wiegmann/File Photo

The gloomy results and forecast from the company, which is one of billionaire Warren Buffett’s largest investments, reflect changes in consumer trends away from processed foods to healthier alternatives.

The after-hours slump erased $12 billion from Kraft Heinz’s stock market value and left its shares trading at their lowest point since H.J. Heinz Co bought Kraft Foods Group Inc in 2015, to create the world’s fifth largest food and beverage company.

The $15.4 billion write-down indicates declining fortunes of the iconic brands and other losses in asset value, meaning the company views those assets as less valuable than before the merger.

“We expect to take a step backwards in 2019,” Chief Financial Officer David Knopf told analysts on a post earnings conference call, promising “consistent profit growth” starting in 2020.

Kraft, which owns Velveeta cheese and Heinz ketchup brands, forecast adjusted earnings before interest, tax, depreciation and amortization (EBITDA) between $6.3 billion and $6.5 billion in 2019, lower than analysts’ estimates of $7.47 billion, according to IBES data from Refinitiv.

On a post-earnings call with analysts, Chief Executive Officer Bernardo Hees said the entire packaged foods industry will likely remain challenged, blaming the rising popularity of private label brands and higher commodity costs.

“Kraft Heinz is in a worse position than many other consumer packaged goods companies because it has got a very weak portfolio of brands. They are not delivering the level of growth that’s needed in this sort of market,” GlobalData Retail managing director Neil Saunders said.

The company, which competes with General Mills Inc and Kellogg Co, cut its quarterly dividend to 40 cents per share from around 63 cents per share on Thursday.

Buffett’s Berkshire Hathaway Inc and Brazil’s 3G Capital control Chicago-based Kraft Heinz.

In addition to lower-than-expected earnings, the company disclosed it had been subpoenaed by the U.S. Securities and Exchange Commission in October, related to an investigation into its accounting policies, procedures and internal controls related to procurement.

The company said it was working on ways to improve its internal controls and determined the problems required it to record a $25 million increase to the cost of products sold.

“That has really made a bad set of results even worse because it has also thrown some uncertainty into the mix,” Saunders said.

For the quarter ended Dec. 29, Kraft had a net loss of $12.6 billion. It earned 84 cents per share on an adjusted basis, missing Wall Street estimates of 94 cents, according to IBES data from Refinitiv.

Net sales of $6.89 billion fell short of analysts’ estimates of $6.94 billion in the reported quarter.

Reporting by Uday Sampath and Nivedita Bhattacharjee in Bengaluru; Editing by Shounak Dasgupta and Lisa Shumaker



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Oil prices dip as U.S. crude output hits record 12 million barrels per day

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SINGAPORE (Reuters) – Oil prices fell on Friday after the United States reported its crude output hit a record 12 million barrels per day (bpd), undermining efforts by Middle East dominated producer club OPEC to withhold supply and tighten global markets.

FILE PHOTO: A Canadian Natural Resources pump jack pumps oil out of the ground near Dorothy, Alberta, Canada, June 30, 2009. REUTERS/Todd Korol/File Photo

U.S. West Texas Intermediate (WTI) crude oil futures were at $56.85 per barrel at 0010 GMT, down 11 cents, or 0.2 percent, from their last settlement.

International Brent crude futures had yet to trade.

U.S. crude oil production reached 12 million barrels per day (bpd) for the first time last week, the Energy Information Administration (EIA) said on Thursday in a weekly report.

(GRAPHIC: U.S. oil production & storage levels – tmsnrt.rs/2Vanxza)

That means U.S. crude output has soared by almost 2.5 million bpd since the start of 2018, and by a whopping 5 million bpd since 2013. America is the only country to reach 12 million bpd of production.

As output surges, U.S. oil stocks are also rising.

U.S. commercial crude oil inventories rose by 3.7 million barrels in the week ending Feb. 15, to 454.5 million barrels, the EIA said.

Analysts say U.S. oil firms will export more oil to sell off surplus stocks.

“The continued surge in U.S. production stands as a bearish dynamic for market prices, especially as increasing volumes get sold abroad in a direct challenge to Saudi Arabia and Russia,” said John Kilduff, partner at Again Capital in New York.

For now, at least, the price dips have halted a rally that pushed crude to 2019 highs this week amid supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC and some non-affiliated producers such as Russia agreed late last year to cut output by 1.2 million bpd to prevent a large supply overhang from growing.

Another price driver has been U.S. sanctions against oil exporters Iran and Venezuela.

Reporting by Henning Gloystein; Editing by Joseph Radford



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Asian shares tread water as investors watch trade talks

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SHANGHAI (Reuters) – Shares in Asia were flat in early trade on Friday following a fall on Wall Street, with a deteriorating global economic outlook outweighing more signs of progress in trade talks between China and the United States.

Market prices are reflected in a glass window at the Tokyo Stock Exchange (TSE) in Tokyo, Japan, February 6, 2018. REUTERS/Toru Hanai/File Photo

Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was up less than 0.1 percent.

(Graphic: Asian stock markets: tmsnrt.rs/2zpUAr4)

Australian shares gained 0.5 percent and Japan’s Nikkei stock index was 0.3 percent lower.

Investors continue to closely watch high-level talks between U.S. and Chinese trade negotiators in Washington, with little more than a week left before a U.S.-imposed deadline for an agreement expires, triggering higher tariffs.

Reuters reported exclusively on Wednesday that the two sides were drafting language for six memorandums of understanding on proposed Chinese reforms, progress that had helped to lift investor sentiment.

But shares on Wall Street slumped Thursday, pulled down by new data showing weakness in U.S. business spending plans and factory activity.

The Dow Jones Industrial Average fell 0.4 percent to 25,850.63 points, the S&P 500 lost 0.37 percent to 2,774.28 and the Nasdaq Composite – which had climbed the previous eight sessions – dropped 0.4 percent to 7,459.06.

The U.S. Commerce Department said on Thursday that domestic orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.7 percent.

Moreover, the U.S. Mid-Atlantic factory sector fell into contraction territory in February for the first time since May 2016, data from the Philadelphia Federal Reserve showed.

“While global manufacturing is weak, services activity is looking more positive. But it is difficult to see manufacturing and services diverging for long,” analysts at ANZ said in a morning note.

“There are strong multiplier effects from manufacturing that imply downside risks to the services sector, particularly in Europe. And trade uncertainty, which is overhanging the manufacturing sector, needs to be resolved.”

The yield on benchmark 10-year Treasury notes edged lower to 2.686 percent Friday, compared with a U.S. close of 2.688 percent on Thursday as a bump from investor optimism about trade talks progress ebbed.

The two-year yield, watched as a gauge of expectations of higher Fed fund rates, eased to 2.5266 percent from a U.S. close of 2.529 percent.

The Australian dollar rebounded after tumbling Thursday on a Reuters report that China’s northern port of Dalian has placed an indefinite ban on imports of Australian coal. It was last up 0.3 percent at $0.7107.

The U.S. dollar was barely changed against the yen at 110.66, while the euro inched slightly higher to buy $1.1340.

The dollar index, which tracks the greenback against a basket of six major rivals, was steady at 96.586

U.S. crude dipped 0.25 percent at $56.82 a barrel.

Gold rebounded after falling more than 1 percent Thursday, with spot gold trading up about 0.1 percent at $1,324.92 per ounce. [GOL/]

Reporting by Andrew Galbraith; Additional reporting by Richard Leong in NEW YORK; Editing by Richard Borsuk



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