Skip to main content

tv   Squawk Alley  CNBC  July 22, 2015 11:00am-12:01pm EDT

11:00 am
usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. good morning, it is 8:00 a.m. at apple headquarters in cupertino, california, it's 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪
11:01 am
♪ ♪ ♪ welcome to "squawk alley" for a wednesday, a busy one. joining us this morning, jon fortt still out west, live in one market at san francisco. and kayla tausche here at post 9. obviously a start with apple. shares are off of their lows, still down after iphone shipments and guidance disappointed last night. our own josh lipton talked to ceo tim cook just before the conference call and josh joins us in san francisco as well with more. good morning, carl. we're firing on all cylinders,
11:02 am
that's how ceo tim cook described apple's performance to me in an interview cook told me that the iphone continues to perform strongly, it is a runaway success, he said. apple shipped nearly 48 million units in the quarter. but that was a disappointment. at least relative to expectations. although analysts at morgan stanley argue this was a function of management taking a more conservative approach to channel inventory. cook was quick to mention the watch, which he said beat expectations. the sell-through he said was higher than ipad units at launch. which wells fargo points out was 3.3 million units, the watch will be a top gift during the holidays and he had this to say about the watch. >> a major highlight over the past quarter for all of us here at apple was the launch of apple watch in april. as you know, we've been very ex-site to get this product to commerce, we started taking
11:03 am
preorders on april 10 and demand immediately exceeded supply by a wide margin. the apple watch sell-through is higher than the comparable launch periods of the original iphone or the original ipad. and so in, as i look at all of these things, we felt really great about how we did. >> now what about ipads? well it was another disappointment with units down nearly 20% year-over-year. cook remaining bullish on the product and the enterprise, pointing to new software, productivity tools and the partnership with ibm. cook did acknowledge challenges to me. he talked about fx headwinds, which he said were category 5, they were fierce and that china could create near-term speed bumps, though revenues in greater china did surge 112% in the quarter. carl, back to you. >> josh, thank you very much. josh lipton. for more, let's bring in ubs
11:04 am
analyst managing director steve melanovich is retaining his $150 buy target on apple. a lot of drama after hours last night. we're still within this range, right, of what, 14 points or so are you surprised at all? >> i think what happened was, that apple had blown out numbers the previous couple of quarters, on the street we got tooics cited what would happen this quarter. it appears that apple was surprised by the demand. that's why the inventories were low in the channel. and remember that at the beginning of the quarter, the street was around 41 million units and ended up at 47 to 48. from that standpoint, i don't think it's really changed about the business, i think expectations need to resettle a little bit. cook is right, the business is doing awfully well. >> steve you and other analysts took the opportunity to ask about china. what volatility the company had seen toward the end of the quarter and the executives sort
11:05 am
of wrote it off. saying while there would be some near-term speed bumps, the revenue speaks for itself. what do you think we'll see? >> i think we'll see continued strength. obviously something we want to watch closely. but revenue more than doubled year over year, so it's accelerating. the company is watching traffic in the stores, app store downloads and they don't see any reason to be concerned. as you mentioned cook said he thought maybe the reaction to china was a little overdone at least relative to apple. china is over half the companies growth, absolutely crucial. we expect the company will continue to do well, at least for the next few quarters. >> given where we see apple right now, the iphone performance. look pretty strong. china with some people were concerned about. the stock took a dip when we started seeing the china hms. doesn't seem to be an issue. the watch had a stronger june than it did the months prior. i mean does everything look set up pretty well for the next
11:06 am
iphone launch, which is really right around the corner. >> i think it does set up pretty well. the big question is you just hah the 6 and 6-plus with the larger screen size. it doesn't appear from the functionality standpoint you'll get that much of a step function. you big question is will you see iphone unit growth in 2016. we think you will. not at the same rate. but the company is building a huge platform in ecosystem, that has longer-term value. with the stock trading 13 times earnings, 10 times x cash, i think people may be underestimating the power of the annuity stream over time. >> steve, you mentioned x cash, people are calling $200 billion an obscene amount of cash to hold on hand. this is about the time we would expect icahn to tweet. is there a point at which you get frustrated at the amount of money they have just sitting around? >> not particularly. because $180 billion plus is overseas. so tlimts what they can do in stock repurchasing.
11:07 am
they have to take out debt in order to buy back more stock. to some degree they're doing that. the company is very conservative if they do enter some new markets like cars by 2020 that could be capital intensive. so the frustrating thing frankly is the tax law, if t would be great to get the cash back to the u.s. >> with the majority of the cash overseas, should we be asking is there more than apple can do here? >> there's somewhat more they can do. they have to take out more debt. there's the limit to doing that. you'll see them gradually increase their debt level. earlier in the year we made a call that the stock repurchase program might be less than people thought. which i think would turn out to be true. you got so much cash overseas and you use up a lot of the u.s. cash to buy back stock. there's some limitations there. the company i think will be investing in interesting new areas over time and it will take some money as well. >> you mentioned a car. people are tweeting around an
11:08 am
exchange that mark andreessen of andreessen horowitz had with a hugheser on twitter. referring to a car, mark says in all seriousness, think they're really doing it. do you? >> i think they're really looking at it. i'm not sure if they're going to do that. if you're going to do a car, now is the time to be thinking about it will. you have two disruptions, autonomous driving and electrification. the auto industry has some difficulties about it. account company get the kind of margin that investors used to. hard to say. they're going to start with card play and some of their software. whether they make a car, i would say it's a 40% probability at this point. >> we've been down that road before. trying to speculate about whether they're going to enter a new category. steve thanks again, good to see you. steve melonovich at ubs. shares of blue buffalo up 30%. we haven't had a lot of new issues. microsoft the biggest lost ever as it continues to shift focus
11:09 am
towards software and the cloud. take a look at shares down about 3%. despite slowing demand for the operating system, the company is set to release windows 10, a week from today. the 29th. ceo satya nadelia commented on the potential for earnings growth in last night's earnings call. >> windows 10 is more personal and more productive with courteno and windows 10 will deliver innovative new experiences like inking on microsoft edge and gaming across xbox and pcs and also opens up entirely new device categories such as holo lens. windows 10 creates opportunities with store, search and gaming. we're confident that these are the right levers to revitalize windows and restore growth. >> jon, as i was reading over the quarter this morning, i kept thinking i wonder what fort going to say. what's your take? >> i don't think this quarter
11:10 am
was that bad. it seemed like microsoft is taking its lumps in this quarter. you had slow pc sales so you expected to see an impact there. on the server software side. they saw slowdown as they tried to transition people into the cloud. but they were also some bright spots. i'm looking here, they said they now have more than 15 million office 365 consumer subscribers, people who are getting office either through the web on a subscription basis. customers signing up at a pace of nearly a million a month. and they've gotten more than 150 million downloads of office mobile on ios and android. that's going to yield some benefits down the line. yes, windows 10, won't have an immediate impact and they're going to recognize windows revenue over time now. so you're not going to get that initial pop. but from what i've seen thus far. windows 10 looks petty good. there's some really old pcs out there that could stand to be upgraded if you're taking a longer view, this is a somewhat
11:11 am
positive story. if you look at where the stock is trading now, still above $40. not like it fell off a cliff. but you know, these transitions, especially when you're dealing with cloud and dealing with revenue being stretched out over time cab little tough. >> and jon, i think that investors who are listening to the call yesterday were trying to square some guidance that cfo amy hood was giving it seems like a lot of the benefit, granted there will be some accounting changes. but a lot of benefit will happen in the second half of their fiscal year, the first half of next year. in the meantime, the guidance for the commercial segment was supposed to be strong, is coming down. what do you make of that? >> they said the transition from on-premise software to cloud, basically people buying the software up front and installing it. you get the big revenue pop. to doing a cloud thing where you're paying a subscription over time. that transition is happening a bit faster than they expected.
11:12 am
when that happens, you've got to stretch the revenue out. you end up with billings that go up. but you don't get the revenue right up front. you've got to make an adjustment. on windows, it's interesting, they're talking about expecting the effect to build over time that sounds to me like they don't expect a huge consumer pop on windows 10 for the holidays. if they have a big surface holiday season on top of xbox, perhaps there's some upside surprise, they're being conservative. >> although nadelia did say they'll have the largest number of windows available for the holiday. we'll see what they roll out in the coming months. jon we'll talk to you later on. let's check the stock market right now. which we're seeing the dow trading negative. it has been all morning. largely because of apple down by about 73 points. which is good for a drop of about .5%. the s&p is down by about .25%. the nasdaq weighed down by apple
11:13 am
and, and of course, microsoft down as well. shares of chipotle reversing a steep loss premarket now soaring after earnings topped estimates. the company did post revenue and same-store sales 4.3% growth for same-store sales that was below expectations. of course a lot that is chalked up to a pork shortage. which the company is hope fog fix, the stock up 7.5% today. gopro has been very volatile as it usually is, post earnings. down by .75%. even though profit and revenue topped estimates. the company helped by strong sales in the asian markets. that's a roller coaster stock, some people were able to get in on an initial drop yesterday after the close and then it rose sharply. down in negative territory again. >> the roller coaster all over the place. when we come back, shares of yahoo falling after another tough quarter for marissa mayer. we take a look at what is still is not working three years into her tenure. plus we talk about iphone sales when it comes to apple.
11:14 am
china could be a major concern for the tech giant. we'll talk about why. and new york city officials are fighting back against mayor bill de blasio's battle with uber. can they change his mind? more on that when "squawk alley" returns.
11:15 am
11:16 am
yahoo shares are down about 1.5% this morning after earnings came in below expectations. revenue a bit stronger than
11:17 am
expected. so how does marissa mayer's turnen-around effort look three years into the job? julia boorstin is live with a closer look. >> kayla, while investors are focused on yahoo's planned alibaba spin-off in the fourth quarter, marissa mayer is working to show that what she calls her transformation of the company is well under way. on the up side, display advertising revenue is up 15% year over year. its best growth in five years. that's in large part because of mayer's focus on what she calls the mavens, mobile, video, native and social ads, which accelerated growth up 60% year over year. the company alluded to its massive potential with sports. its fantasy sports games which just recently launched betting, have some potential traction. 1.3 million people who have tried them, about half of those have paid to actually make bets with money. and with upcoming deal to live-stream an nfl game in the fall.
11:18 am
mayer alluded to other potential sports deals that could be in the works. but on the down side, yahoo's traffic acquisition costs soared over 350%, driving earnings down 2 cents lower than expected and analysts are concerned about weaker-than-expected guidance as the company continues to spend to grow market share. there's also the fact that search revenue fell 3% after fees paid to partners and yahoo is losing market share in mobile advertising, amid a surge of rivals, but analysts' main frustration seemed to be that the company would not comment on yahoo's tax liabilities around the alibaba spin-off. for now that is still the main factor influencing the stock. jon, over to you in san francisco. >> all right. thanks julia. for more let's get over to mark mahaney, who joins me here. internet analyst obviously for rbc capital markets. you've got a note out after
11:19 am
earnings saying fundamentally washed out stock. which when i see washed out, i think washed up. that's not how you mean this. there could be some positives here. especially given some of the commentary around video. what's the bottom line? >> washed out, not washed up. washed out because you've got a 20% cut in forward forecasts and the stock only goes up 1%. that tells you how small the fundamental expectations are. that the street and investors have for yahoo, as julia was mentioning, the market wants clarity on the tax efficiency of the alibaba spin-off. they want to see recovery in alibaba shares. that's the single biggest catalyst, we haven't seen a fundamental turn-around at yahoo. three years of declining cash flow out of yahoo. it's not a turn-around until the cash flow improves. there's things that could turn right. everything seems to have turned wrong for yahoo and it's priced in. is there under the surface good story emerging, though, i remember a couple of quarters ago marissa mayer was talking
11:20 am
about mobile and video and how that was actually growing. it was just being overshadowed by the decline in display. now we've got search coming down. is there a crossover point coming soon where we're going to go i had no idea how beautiful this flower was that's poking up from the manure? >> yes there's some of both of that. i won't use the second word. but let's see, it's great that the mavens, mobile, video, the traditional desk top business is underperforming for yahoo and the majority of their revenue, 60%, 70% is the traditional desk top display revenue. so the transition will take a long time. you can get better growth if you want growth out of facebook or google. yahoo has a the lot of catching up to do. you don't have it at yahoo yet, there's no turn-around yet.
11:21 am
maybe next year. >> we talk a lot about yahoo's story. from a pure stock standpoint, this is a special situation, would you advise anyone who doesn't have a good handle or at least some conviction about which direction the tax liabilities could go, to stay away from the stock until the spin-off is done? >> if you know with conviction what the they're going to get that there will be in the fourth quarter, is a tax-free spin-off, i think it will be a positive catalyst to the stock. we have a buy on alibaba, we think it's worth more than where the stock is trading now. we know we have a lock-up expiration coming in the middle of september. there are two emerging visible trading positive catalysts on yahoo shares. there's an interesting long trade here. we also look at it as a basket. we look at the fundamentals and those don't inspire us, that's why we have a hold call on the stock. >> mark i'm thinking about all the major moves we've had post
11:22 am
earnings, whether it's google or netflix, apple. now we've got amazon and now we have the new acronym. fang, facebook, amazon, netflix and google. which way do you go tonight? >> we'll have amazon. amazon will be tomorrow night, the other f.a.n.g., i hadn't heard that before. facebook will be next week. expectations are super high going into both of these prints. in the wake of what happened with google and netflix. as a trade, not that compelling to us. as a long-term six do 12-month story. we like both stocks, fundamentals are improving their inflection points, in terms of amazon's north american retail growth. we think there's be a inflection point from the facebook points in terms of google results, video advertising online. if that's an inflection point. facebook is a great derivative tradeoff. we like both of those stocks. >> we're halfway through the year. for marissa mayer, at yahoo.
11:23 am
we're still treading water at least on the fundamental business, what kind of a grade do you give thus far and is the pressure increasing or is it just about the same given where we are? >> i think the pressure is increasing on her. we're into year three and we haven't seen a fundamental turn-around. she's done a lot of the right things from a value perspective. from a growth perspective we haven't seen a fundamental turn-around. i would argue from a growth perspective she hasn't been aggressive enough, in terms of acquisitions. what she's mostly answered to was the value side of the shop. she's returned a lot of cash to shareholders, they're working to spin off alibaba efficiently and taking down the head count. but from a fundamentals perspective you're not going to get paid more than five times cash flow if that's all you got. >> mark ha haney from rbc, thanks so much. and coming up next, we've got some new york officials fighting back against the mayor's proposed cap on uber.
11:24 am
we'll look at uber versus nyc after the break. everywhere you look, it strategy is now business strategy.? and a partnership with hp can help you accelerate down a path created by people, technology and ideas. to move your company from what it is now... to what it needs to become.
11:25 am
starts at 6:30 a.m. - on the (vo) rush hounose.und here but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours.
11:26 am
hi mi'm raph. tom. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here, we're here, and we've got your back. legalzoom. legal help is here.
11:27 am
s the battle between new york city mayor bill de blasio and uber econgratulatescalates, the comptroller urges a delay on a bill for thursday that would put a cap on transportation vehicles. here's what he told us. >> i want very much to help the people who own those medallions. but you don't do it by trying to pick sides or do it at the expense of these other companies like lyft and uber. why don't we have a conversation, city hall should bring everyone together. this is an incredible transportation moment. not a political moment. if we get this right in new york city, we can be transcendent. new york city should be leading the way in figuring out what our transportation infrastructure is going to look like. >> a long-running debate in a
11:28 am
city that has about 26,000 uber drivers against 13,000 taxi medallions. seems to be coming to a head this week. it's amazing how many cities this has played out in. we're not reaching the riot level of paris of a few weeks ago, but jon fortt would you argue this is one of the top local political stories in one of the biggest cities in the world? >> it is and it's playing out in interesting way. i was just at lyft yesterday they are also against this cap. no surprise. there's a wrinkle that lyft says they're growing faster than uber in new york city. so if they were to be a cap, it could actually benefit uber in a weird sort of way. because then lyft can't continue to grow. who knows, uber starts trying to poach more lyft drivers, to drive exclusively for uber. there could be unintended consequences to this kind of a cap.
11:29 am
we'll see if there's last-minute change to whether that vote happens or not. >> i saw a billboard the other day, gueraranteeing $38,000 a yr if you drive for uber. >> the number is going up. the first time it was saying $5,000 a month. now it's $10,000 a month. >> you only have to work 16 hours a day, but yeah. >> hillary clinton over there, do i hear her? let's bring in simon hobbs, here at post 9 with a mixed picture in europe. >> lower for the second session in europe. the bank of england minutes were lee leased. it looks like more members of the monetary policy committee are looking to a rate rise in the uk. the story is stocks that are moving to the negative. i mean interesting to see the apple effect ripple through. chem of the conductors are
11:30 am
semiconductors are still down in negative territory. the other thing, oil is down today. we've also seen a lot of the miners still with materials and commodities are down. a lot of the miners or some of the big miners are taking a leaf out of opec's book on iron ore and continuing to expand their capacity. hp saying it's record capacity now with iron ore, bhp. expanding capacity. greece is important today, as we it is the second parliamentary vote that tsipras has to get through. on tonight failed banks and speeding up the justice system. the european central bank added $900 million euros to the liquidity of the greek banks taking it to 90 billion euros. interesting to see that the greek government is aiming to complete the third bailout agreement. that full negotiation, a full
11:31 am
negotiation by august 20. an awfully tight timetable. back to you. >> shares of apple, falling, could the company have trouble ahead from china?
11:32 am
11:33 am
11:34 am
. here's your cnbc news update. police arresting a tunisian and is a pakistani on suspicion they were plotting attacks in italy. the men were arrested in the northern city of bruscia, that has a u.s. military presence. 32 people were killed in bomb attacks across baghdad yesterday. the deadliest took place when a car bomb packed with explosives detonated in the shiite district. no one took responsibility. ikea is offering a free wall-anchoring kit for about 27 million chests and drawers after two children died when the furniture tipped over and fell object to them. neither chest had been secured to the wall. the company has received 14 other tip-over incidents resulting in four injuries. nasa has released an extraordinary photo of earth that was taken from more than a million miles away. it shows the earth brightly lit up by the sun. nasa says the purpose of the
11:35 am
photo is to show the effects of sunlight scattered by air molecules. i think it's pretty awesome. that's our news update for this hour. back to "squawk alley." shares of apple still slipping this morning, responsible for the lion's share of decline in the dow there was a bright spot in the report, china. seeing revenues more than double in the quarter. here's ceo tim cook talking about china on the call. >> despite the volatility and the champion he's market, there's still up 90% over the last year. and they're up 20% year to date and these kind of numbers are numbers i think all of us would love. i think generally, this has been at least as we see it, maybe it's not true for other businesses, that this worry is probably overstated.
11:36 am
and so we're not changing anything. we have our, the pet p.e.d.al to the metal on getting to 40 stores mid next year. >> joining us now live on the phone from beijing is the managing partner with chinese focused ggb capital and an early investor in xiaomi. i would like do get your take on apple's quarter we saw revenues double. what do you make of it? >> i think iphone has become a fair-weather for the new economy in china. a the lot of us who watch china know is the economy is bifurcated. apple iphone as well as xiaomi phones are on the forefront of that. >> we saw official gdp come in at 7% for the most recent quarter. i'm wondering if you think that we'll see any departure from that. and a derivative effect on apple
11:37 am
sales in china in the current quarter? >> that's a very good question. i think what will happen in the next coming quarter will be on the strength of consumers in china. as i mentioned, the market bifurcating, economy online retail is suffering. but the online economy powered by the mobile internet is expanding really fast. when it comes to hardware, software, servicing the new economy is we think should be benefitting in the strength of that. the strength of that will be telling based on iphone numbers and numbers for the coming quarter. [ inaudible ] >> can you give us a sense of who benefits from the picture you just painted and who loses? i assume you're arguing that apple is a winner under the scenario. but are there examples of clear-cut losers? >> yeah. i think the -- offline retailers
11:38 am
are going to suffer. you go to malls in china, there are not as many people in the malls, from big city to even -- [ inaudible ] and online growth since then jd and xiaomi both are strong. the strength of that growth is very telling from the -- [ inaudible ] people are nervous about the market corrections. how the market may affect consumption. in this kind of market will be interesting. but [ inaudible ] [ inaudible ] >> lanchans, do we look at the e results of being indicative of how the entire smartphone is doing? or is apple gaining a
11:39 am
significant amount of share even as you look at other companies like xiaomi, which you're invested in? should xiaomi be worried about this or is this on track with the growth it is seeing as well? >> in general the top brands in the cell phone category, whether it's iphone and are leading the pack in market share from other people. as well as just the memorial market continues to consume itself. 2015 smartphone has slowed down versus a year ago. that's for sure. the major band has a very [ indiscernible ] . and iphone is in in the consumer market, the more upper middle class, upper class of the segment. the segment keeps growing. the 20 million, 30 million user kind of segment. >> 80 million.
11:40 am
and that the growth of that segment is powering growth. >> hans tung from ggb capital, calling in from beijing and xiaomi, interestingly, tim cook brought up the idc figures that china's smartphone units were only supposed to grow about 5% by their estimates. and he stacked his results up against those and showed you how much they are growing. >> thanks to hans. when we come back periscope's co-founder revealing a new feature for the live-streaming service. details on that. but first, rick santelli, what are you watching today? >> well i'm watching some of the bounce-back in markets. and not all markets, we're seeing buying in treasuries, selling in equities. we're going to talk about signs. things like brake lights, traffic signals, turn signals and how it may relate to the markets. can a business have a mind?
11:41 am
11:42 am
a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪
11:43 am
can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? all the trades for today and tomorrow. plus goldman sachs says run with the tiger. the big oil stock they say to buy now. and king dollar stock play is one money manager has three picks for your portfolio. coming up top of the hour. let's get over to the cme group this morning. check in with rick santelli.
11:44 am
hey, rick. >> well of course i'm still preoccupied with what china did regarding their equity markets. do all ends justify means and how far is too far. when we look at what happened in china we've had so many different guests come on saying listen, we get it. the market is correcting a bit. it's all good. is it really about markets correcting? is it really about making sure that outcomes are guaranteed? how far is too far? if we made green, red and red green and left turn signal right turn signal, switch the wires so instead of when you hit your brakes, your brake lights go on, your headlights go on, what kind of traffic pattern and traffic jam would we create on major thoroughfares. that's silly. but is it really? when you get market signals, let's look at the relationship between the equity markets in china in the crb index for 20
11:45 am
years. you see that on the screen. they don't correlate perfectly. but trust me, i've looked at this carefully. they do correlate and at times very tightly. look what happened on the far right recently. and let's blow that up a bit. the next chart we zero in on that a little bit. basically you have the chinese market going up, but the crb going down. that's because they were manipulating, managing, restricting, whether it was short-selling, a variety of issues that ultimately proved to stabilize the market in the beginning on a small number of stocks, but over time, more. but this is imparrot i have been. are all investors just going to you know accept the check and put tape over their mouth, put their hands over their eyes, put their hands over their ears and say this is fine? these market signals are important. because at some point there's no way to assess what capital is doing. and i understand china in many ways is a special case.
11:46 am
they're not really a developed economy. but they're a thriving, growing economy. that really isn't and doesn't have the type of structure that maybe it ought to. these are growing pains, but in the end the chinese markets, no matter where they are on the maturity timeline, they do dictate lots of flows globally. this is something we want to pay attention to, especially at a time where how many earnings, whether it's google, microsoft, tech, talked about how the dollar's value affected earnings. we're arguing about degrees, if we need to recalibrate zero interest rates in a global economy this is going to be no easy task. and multinational corporations are going to have to suck it up. because the collar ultimately has to widen out on value if our central bank raises rates, these are managed outcomes. but the market will prevail and i think that that's exactly the point i'm trying to make. kayla. back to you. >> perhaps it will prevail next
11:47 am
quarter. rick santelli in chicago, thanks to you. up next, shares of six flags in the green after profit topped expectations, the ceo will join us in a cnbc exclusive. you focus on making great burgers, or building the best houses in town. or becoming the next highly-unlikely dotcom superstar. and us, we'll be right there with you, helping with the questions you need answered to get your brand new business started. we're legalzoom and we've already partnered with over a million new business owners to do just that. check us out today to see how you can become one of them. legalzoom. legal help is here.
11:48 am
11:49 am
shares of six flags gaining slightly after recording attendance at the theme parks up 9%.
11:50 am
but the average spend per visitor is falling. our simon hobbs is back with an exclusive with the ceo. >> jim, welcome back to the show. >> so you manage to turn the stock around with what you said on the conference call about the summer. what exactly is happening? attendance up, but take down. >> our attendance is up 9%, so very strong performance attendancewise, revenue year to date up 6% and ebita up 11. now average per caps, which is what i think you are referring to, is down a little bit. but you've got to remember, we've had tremendous success in our season sales up 53% on the active base and that affects the mix. overall an amazing performance. >> every park gets a new ride every year. and i think we've got the batman 4-d coast anywheer in texas. what works now, how, you're very empirically driven in what you do. you're by the numbers, what works with the laser focus on
11:51 am
being a regional player? >> what really works is providing something new for our guests every single year. in every single park. they love, you love innovation, i love innovation. we do that, but then concurrently we're working extra especially hard to make guest experiences the best they can be. so interactions with our employees. the food they're getting. you know all of those matter and our guest satisfaction scores are at an all-time high. >> 39,000 employees, only 1900 of those are full-time. how are you affected by minimum wage legislation and by the proposed changes to overtime? >> any legislation change like that do affect us. and in the last couple of years we've taken incredibleal costs on board as part of those changes. >> less staff employed as a result? >> no, there aren't. dmt last five years we've been very stable as an employer and growing as i said financially and that makes us better employer. >> a lot of shareholders love you for your yield.
11:52 am
4.4%, very tight, reallocation of capital there. you recently refinanced your debt. creating capacity for another $100 million a share buybacks, that would seem a drop in the ocean. what's going on? >> we are a yield and growth stock very unusual, right? if you look at what we've done. we're delivering a $4.5% yield. which is two times the s&p 500 and in the last four years we've averaged over 20% growth in cash eps. 28% in the last year alone. and those two things, that's three times the market average. that's why we're growing so effectively. >> why are you disappointed the share price isn't responding? i mean since 2009, you're up from $8 a share, 500, 600%, but shorter term, you've not been able to help the highs you've had. how do you feel about that? because you're focused on that. >> i'm never disappointed in the share price. you no he why? because great performance always
11:53 am
come through they may be short-term blips, it doesn't matter. since i was your show, share price sup 17%, but the cash eps sup 32%. the share price should be moving up with that performance. >> 300,000 twitter followers, how does social media work for you? >> very important. when you think about our guests, you're looking at 27 million guests, half of those are teens, they live by social media we're very powerful social media player. >> how have you learned to optimize that. >> we have our own team, a small team that drives market research. and they do an amazing job. we use it to sell our parks in essence. >> good to see you, jim. >> jim read anderson there, six flags chairman and ceo. back to you. when we come back, a big change could be coming for periscope, we'll hear from the company's co-found anywhere just a moment.
11:54 am
so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done. ahh, you're good. i like to bake. with at&t get up to $400 dollars in total savings on tools to manage your business. no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack,
11:55 am
a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great. [ radio chatter ] ♪ [ male announcer ] andrew. rita. sandy. ♪ meet chris jackie joe. minor damage, or major disaster, when you need us most, we're there. state farm. we're a force of nature, too. ♪ we're a force of nature, too. i brto get us moving.tein i'm new ensure active high protein. i help you recharge with nutritious energy and strength.
11:56 am
i'll take that. yeeeeeah! new ensure active high protein. 16 grams of protein and 23 vitamins and minerals. ensure. take life in. is welcome back, our cnbc san francisco bureau teamed up with muck rack for an event focused on innovation last night. innovation in digital video, periscope co-founder joined us with a look inside new things the company is working on.
11:57 am
like allowing users to save video streams and here's the co-founder on another feature he says is heading our way. >> our observation, our personal feelings guided us toward portrait being the predominant capture mechanism and viewing experience, that creates conflicts where when the output device from a periscope ends up being a tv now all of a sudden our experience doesn't look so hot. which is why we need to make it better. >> so, they're looking at actually allowing you to do this. and do periscopes in landscape mode which for those of us who are work in tv is a positive. also save some of those video streams. so they're figuring out exactly how they want to do it. so expectations line up for the user, who seussed to perhaps different things, but definitely these would be big changes for periscope in the way it gets used, guys. >> that's fascinating to me. you talk about for those of us who stream. for those of us who grew up watching any kind of visual
11:58 am
medium. movies in 2-3-5. television, we're used to seeing the worrell in media in landscape mode. it's amazing that it's taken periscope this long to come around. >> there seems to be this debate over horizontal versus vertical media snapchat is touting its vertical video as saying that advertisers have their videos watched what, seven, nine times more often. you don't have to turn the phone, what does that do? >> if you're going to be mobile native, this makes sense and kayvon did say this as well. but periscope has seen an interesting uptick in people new to the service, viewing it on a pc. there are certain case where is this could make sense also. so i mean of course they started off ios only, expanded into android. i think this shows they're definitely willing to be fleckible in who they allow people to consume over this new media one thing they're not
11:59 am
going to be flexible on, they want to stay live. they're not interested in allowing people to tape stuff and put it up later. there's something about the feeling of truth in broadcasting something live that they view as being essential to periscope. >> that's obviously one of their key selling points. >> meantime we've been talking obviously apple all morning. it is interesting to watch an intraday here below 124. we'll see how we hold up. whether or not it rolls over into the afternoon session. as the dow appears to be doing. we're down 86 points, apple the worst-performing dow component. would be much worse off if boeing hadn't crushed numbers today. >> technical experts are looking at 120 as the level to watch in apple. volume has already surpassed its 30-day average. it's got an asset class all its own, in early trading. it surpassed trading in all stocks, all futures and all debt. >> anything with a symbol. >> apple leads it in volume by far. and chipotle, very interesting
12:00 pm
has moved 100 points from the lows after the bell. last night now to 726.64. comps were 4.9. people believing the growth was intact. >> and the c rampb -- carnitas will come back. let's meet today's starting lineup, steve weiss, josh brown, jon and pete najarian. >> earningspalooza. apple, gopro, coca-cola, caterpillar. trading all the big earnings. eye of the tiger, goldman says to buy exxonmobil with conviction, stick around to find out why. we begin with trouble in techland. microsoft, yahoo dragging down the nasdaq after earnings. microsoft and yahoo losing money, but apple made billions. the company beating expectations on the top and bottom lines. not enough to

29 Views

info Stream Only

Uploaded by TV Archive on