Electrolux AB (ELUX) Q2 2016 Conference Call

Jonas Samuelson, CEO and President

Performing well in major appliances

“Electrolux operating income for the second quarter increased significantly compared to the same period previous year and amounted to SEK 1,564m. Of the Group’s six business areas, four achieved an operating margin of above 6%. The improvement was particularly strong in Major Appliances EMEA and Major Appliances North America. Major Appliances Asia/Pacific and Professional Products showed a stable development in earnings.”

Uncertain times in Europe following the Brexit yet positive in outlook

“Following the Brexit referendum, the outlook for UK demand and the British Pound is uncertain…We expect the European market to continue to grow in 2016 and therefore increase our outlook to 2% to 4% growth for the year from 2% to 3%, reflecting the good trend but also an increased uncertainty in the UK.”

Currency movement are eating into earnings

“Currencies continue to have a negative impact on earnings. However this was to some part mitigated by price mix. All-in-all earnings improved in all business areas versus last year except for Latin American.”

Outlook positive for Europe and North America, negative for Latin America

“We expect the positive growth trend in Western Europe to continue in most markets but with the Brexit uncertainty. In Eastern Europe we have seen Russia stabilizing and expect the region as a whole to show growth going forward. We anticipate demand in North America to remain positive in 2016, supported by a solid macroeconomic environment and good consumer confidence. Latin America continues to be weak with low visibility.”

They see opportunity in North America

“North America is the largest professional kitchen equipment market in the world, so it’s interesting from that perspective…a lot of the global chains are headquartered in North America and we’re relatively weak in the North American market which means that we have a lower chance than we otherwise would have of being a key supplier to some of these chains. So that is one of our key strategic priorities, to make sure that we build the presence in North America so that we can become a true global supplier. I think we see a lot of opportunities there.”

Anna Ohlsson-Leijon, CFO

Sluggish organic and acquisitive sales growth

“Organic sales was down 0.9% in the quarter mainly due to lower volumes in Latin America and the repositioning in small appliances, in combination with lower private label sales in North America. Acquired growth was 0.1% positive due to contribution from our acquisition of Veetsan last year. The currency impact was negative 3.6% and this resulted in reported sales of negative 4.4%.”

Significant cost cutting boosted earnings

“Moving to the net cost efficiency. This shows the net impact from product cost improvements of in total, SEK761 million. This included cost savings from raw materials which was about SEK250 million in the quarter and the impact of other productivity work and efficiencies throughout the Group. In total we had a margin accretion of 0.6% from the organic part and a 2.5% in contribution from cost efficiencies.”

A strong cash conversion rate gives them the firepower to invest and acquire going forward

“The strong cash conversion rate in 2014 and 2015 leaves us with a strong balance sheet which means that we have the funds and the firepower to continue with our investments as well as look at further acquisitions.”

Additional note on cash by Jonas: “the Board will make sure that we have a plan to have an appropriate balance sheet strength going forward but not over-capitalized and of course that includes M&A and possible cash distribution.”

Volvo (VOLV) Q2 2016 Conference Call

Martin Lundstedt, President and CEO

Declining sales but improved operating profits reflective of cost cutting efforts

“Sales decreased with 7% to 3%, excluding FX and divested units, the underlying performance of the business improved from 7.1% to 7.8%, and in particular then that the Truck business, the global Truck business, reached 10% operating margin excluding the provision we made during June 4, the European Union investigation.”

Volumes lower in the US and higher in Europe

“When it comes to volume development in the second quarter, truck volumes were down with 5% whereoff Volvo down with 9%, in particular the US minus 39% that couldn’t fully be offset by Europe that was up 17%.”

They are positive on Europe with no sign on Brexit effect

“For Europe, we have a continuous good momentum and our expectation is that the market will land on somewhere around 290,000 and that is the forecast that we’re also keeping from quarter one reporting. And as I said, we have no strong signs of Brexit so far.”

Providing quality more important to them than chasing market share.

Main priority now is not really to hunt market shares without maintaining the right quality when it comes to our different deals to our customer base because we have the necessary scale already in the system, but with good quality we will grow eventually also with our customers. And we will grow with quality.

On Construction Equipment

“…we see growth in Europe and we see a slowing North America, specifically on general purpose equipment, larger machines related to oil and gas and mining, and the continuous weak situation in emerging markets and the big volume drop.”

Earnings Call Notes 1.31.13

Below are quotes from an assortment of recent earnings calls–snippets of information that I find relevant (typically on a macro/industry level) from companies that I have some working understanding of.  Complete transcripts can be found at Seeking Alpha.


Banco Santander (SAN)

capital ratios rising for the sixth year running up to 10.33%. loan-to-deposit ratio is now below 100%

we have assigned since the beginning of the crisis over EUR 23 billion to specific provisions for loan losses and real estate, which account for 10% of our total loan portfolio in Spain.

As for our NPL ratios, the group ratio was 4.54%

And if we look at lending, lending fell overall by 6%, but big differences between segments. real estate purpose fell 32%; the individual household mortgages and consumer loans down 7% due to household deleveraging…reasonably stable lending to companies and to the public sector…balances with large corporates have fallen, too…because of continued deleveraging by corporates.

Brazil, the macroeconomic environment has been quite different to what we expected and what the market expected…Growth on GDP was of about 1%….we think that is going to pick up in 2013 and grow at about 3%. Interest rate at historic growth, 7.25% and inflation almost 6%.

In Spain, the recapitalization of banks and the private sector adjustment already completed

In short, we believe that the worst part of the cycle is already over. Realistic exposure is fully provisioned.

Whether we plan to repay anymore or return anymore [of the LTRO], we are using as cushion basically or insurance…So the decision of whether to repay any more or return any more, well, the answer would be probably, yes. But it will depend on the evolution of the markets and the impact on our income statement, well, it costs 75 basis points…And the liquidity buffer had a negative impact on our income statement

Southern Company (SO)

We continued the ongoing transformation in our generation mix, generating more energy from natural gas than coal for the first time in our history

our kind of color on where we believe the economy is headed is slightly more bullish than we were, say, in the third quarter. We are expecting a backend loaded economic recovery but I feel pretty good about it right now based on what we see.

energy efficiency has almost no influence on the consumption of our customers. 88% or so of usage can be explained by either the income growth of our customers, the price of our product and weather.

We all have these goofy devices. We all have iPads and iPhones and bigger plasma TVs and everything else and when we see the progression that people are moving from small homes to apartments into you now primary housing, we see a growth in square footage per person…All of these things contribute to usage growth

if the final rule is anything like the proposed rule, conventional coal generation is just not doable…I go back to the families we serve, 48% of which make 40,000 or less, those folks make tough kitchen-table economic decisions every day. Their demand for energy is relatively inelastic, and so anything the EPA does which adds cost to energy tends to slow down our economic recovery 

Dow Chemical (DOW)

wet shale gas dynamics are fundamentally changing the game for integrated North American based producers like Dow. This is clearly evidenced by operating rates in the United States and Canada being in the 90s, while Asia and Europe have been in the 70s.

as global demand outstrips supply in the next few years and world GDP gains further traction, we anticipate operating rates higher than 90% leading to substantial margin expansion, a double peak, so to speak.

Dow’s feedstock flexibility will allow us to continue to pivot so that we continue to take advantage of our uniquely advantaged feedstock slate and we are building on this advantage.

Time Warner Cable (TWC)

Our programming costs per subscriber has grown 32% in the last 4 years

Our residential video ARPU increased 16% over that same period, so we’ve effectively raised pricing a little faster than inflation but only half as fast as programming costs have risen.

ARPU per customer relationship, which increased 4% over last year and is approaching $120 per month

We do not pretend that these deals [i.e. the Dodger’s deal] are inexpensive or cheap. And our sense is that if we’re going to carry these games, they’re going to be expensive when we get them. So what we think we’ve done with these deals is to minimize and stabilize the cost over a long time period.

On Google in Kansas City: The reality is, today, there are not really applications that require 1 gigabit per second. 

Qualcomm (QCOM)

this brings 3G penetration to 29% in China, so excellent progress and still plenty of opportunity ahead

our design pipeline continues to grow. There have been more than 600 Snapdragon-based devices announced and another 170 plus devices announced based on our Qualcomm Reference Design solutions.

we are seeing more efficiency in the 3G, 4G inventory channel as the industry continued to move toward an open retail channel versus a carrier centric channel

We are reaffirming our estimate for calendar 2013 3G, 4G device shipments of between 1 billion and 1.07 billion units, up approximately 8% to 15% year-over-year 

UPS (UPS)

in the U.S, we were off to a surprisingly strong start in January

Holiday retail sales came in slightly below expectations but UPS still hit a new high, delivering over 500 million packages globally during peak season.

On our peak air day, Christmas eve, UPS delivered over 8 million air packages, more than 2.5 times our normal air volume and over 1 million pieces more than last year.

UPS annual revenue of $54.1 billion was our highest ever, as were the 4.1 billion packages we delivered globally.

I think that overall we still see 2013 as a slow growth economy. 

Facebook (FB)

We started off the year with no ads at all on mobile and we ended up with approximately 23% of our ads revenue coming from mobile in the fourth quarter.

Marketers are realizing more and more that Facebook is one of the best places to reach their customers on mobile because of our unique ability to reach specific target audiences at scale.

our total expenses, excluding stock comp, will likely grow by somewhere around 50% in 2013

Paccar (PCAR)

PACCAR’s retail share of the U.S. and Canadian Class 8 truck market was 28.9% and DAF’s share of the European above 16-tonne market was 16%

Looking at the truck market overall in 2013. The U.S. and Canadian Class 8 industry retail sales are estimated to be in the range of 210,000 to 240,000 units. In Europe, the “greater than 16 tonne” truck market is anticipated to be in the range of 210,000 to 250,000 units.

Natural gas will be a factor, but at this time it’s a pretty small factor. We’ll just have to see over time how the infrastructure shakes out 

Core Labs (CLB)

Yeah, Jeff, we actually don’t think that the shale plays are well understood at this point. Just over the last couple of quarters, we have been able to determine through our fracture diagnostics technology that additional stages, closer spaced, so you have more in greater contact with the reservoir phase is going to proliferate more stages and more closely space stages.

We believe that currently there are only one or two countries that have spare capacity and that amount is fairly limited. If we get some robust economic growth around the world, we are going to see crude prices, Brent prices right back at $150.

Q: perhaps two substantial liquids discoveries yet to be made or announced in North America, can you give us a feel for when we might, the mystery might go way? A: Well, that’s up to our clients, acreage positions are being taken and I got a fairly, once of the acreage positions are established as which happened in the Eagle Ford and then in the Utica announcements will be made. So it’s not up to us, its up to our clients.

Conoco Phillips (COP)

We ended 2012 with just over 8.6 billion BOE of reserves, up 3% overall compared to 2011. Importantly, we added 942 million net BOE of reserves organically resulting in an organic reserve replacement rate of 156%

I think as we look out and think about the future opportunity, I think with this unconventional revolution that we are seeing in North America right now, and some of the technology advances in the deepwater arenas that are becoming pretty perspective. It’s kind of in my view turn from a bid of resource scarcity that was leading to a lot of merger synergies over the last 10 or 12 years and resource capture into a view now…we just think that growing organically, there is the opportunity set to go do that and the option value associated with growing organically is, we thought better in our portfolio then trying to do that through an M&A channel, or some resource access that way.

Viacom (VIA)

the consistent refrain we hear from our audiences is that they want new shows and new episodes in faster cycles, and so we are delivering at all our networks, accelerating development timelines and production to accelerate our ratings turnaround.

original programming that’s new and exclusive to us where we own all the rights and we think that is going to be critical as you move into the future where this program lives across platforms and around the world.

we have content on platforms like Netflix and Google. The growth of streams of our content far outpaces the growth of subscribers that they have

Under Armour (UA)

In our IPO year of 2005, compression represented 64% of our apparel mix. This past year, that compression number was down to just 14%.

we want to go back to this concept around cluster marketing, and the idea there is to create holidays. So holidays are places where based on the entire brand meets at once. What we want to do is consolidate our spend to tighter, but louder messaging

Cullen/Frost Bankers (CFR)

For the year, return on average assets and equity were 1.14% and 10.03%…average total deposits were $17.3 billion, up 13.6%…average loans were up 11.2%

It’s really nice when you’re growing this strong organically. Just to put it in perspective, the biggest bank we ever bought was about a $1 billion. And today, we’re growing at a rate of about $2 billion a year. So this organic is getting better.

You don’t just go make the first call and get the loan…We know that the work we do today is going to payoff about a 120 days from now.

you’ll see a juvenile delinquent come in [to our markets] every now and then, and that juvenile delinquent doesn’t mean a little bank. It means, usually the too-big-to-fail will come flying in with some crazy pricing.

Bank of Hawaii (BOH)

We had a record number of visitors to Hawaii this year and visitor spending reached a record-high of 14.3 billion that’s up over 18% for the year. most of that increase coming from our International segment.

Year-to-date return on assets was 1.22% and return on equity was 16.2%. Our year-to-date efficacy ratio was 57.9%, a reduction from 59.2% in 2011. Earnings per share was up 8.3% in 2012. Loans grew 5.7%. Shareholders equity grew 1.9%.

Callaway (ELY)

From a market share basis, through November our US hard goods market share declined to 14.4% versus 15.6% in 2011

what’s occurred between 2007/2008 and the current somewhat compressed gross margins is rising costs out of Asia where we source most of our products, and an increase in the amount of technology in the products such as adjustable drivers and other technologies that in many instances are being sold at the same price points that we’re popular in the market in 2007/2008. So those factors are real in our industry as candidly they are in all industries, and we have to work through those. 

Hershey (HSY)

Halloween results were in line with expectations. The late October storm that affected the East Coast did not have a material impact on our overall Halloween results.

Earnings Call Notes 1.30.13

Below are quotes from an assortment of recent earnings calls–snippets of information that I find relevant (typically on a macro/industry level) from companies that I have some working understanding of.  Complete transcripts can be found at Seeking Alpha.

Amazon (AMZN)

There is not a lot I can comment on in terms of our plans similar to last year no as we progress through the year, we can give you further updates on what we plan to do there…. 

there’s not a lot more I can add to it… 

just stay tuned and we will let you know as the year progresses… 

we will continue to expand our footprint over time …Beyond that there is not a lot I can add… 

we haven’t given a lot of detail but I think one thing certainly to look at… 

I can’t give you specific numbers but we have seen very good progress… 

I can’t give you specific for attach rates but the business is making good progress… 

I do not have a specific number for you there, but yes… 

We will continue to add selection on the Instant Video. Beyond that, you have to stay tuned… 

There are not a lot of specifics. We have long been in the practice of not talking about trends in within the quarter in terms of year-over-year growth or anything like that… 

we haven’t broken out the first-party versus third-party units since it’s something we have done for that’s only I am today or we have done in previous calls, so it’s not I can help you with there… 

There’s not a lot I can specifically talk about as it relates to LivingSocial …

Boeing (BA)

commercial airplane deliveries was 601 delivered, the most since 1999, and the second-most in commercial aviation history. 

we also led the industry in net new orders, with 1,203, the second highest total in our company’s history 

Our commercial backlog of nearly 4,400 airplanes totals a record $319 billion 

Nearly two-thirds of our order book is with customers outside the U.S. and Europe 

For the quarter, we delivered 23 787s, reaching a total of 46 for the year 

doubling 787 production, increasing the rate from two airplanes per month to five per month 

final assembly build rate to seven per month in mid 2013 and 10 per month by late 2013
The 737 production rate will increase to 38 per month in the second quarter of this year and then move up to 42 per month in the first half of 2014.

Jones Lang LaSalle (JLL)

while capital values continue to increase in most major markets around the world compared to the prior year, the rate of growth has slowed in a number of key markets. 

The vacancy rates across 98 global markets remain stable in the fourth quarter at 13.2% as vacancy declines in the U.S. and Europe were offset by increases in Asia Pacific. Prime rental growth slowed in the quarter, increasing 2.1% year-on-year, while Beijing, Sao Paulo, Mexico City and San Francisco recorded the strongest rental growth in 2012 while demand falls, so prime rent decreased furthest in Hong Kong, Singapore, Paris, Madrid and Brussels. 

institutional investors are maintaining and, in many cases, increasing their allocations to real estate, attracted by returns that compare favorably to other investment options.

Robert Half (RHI)

Small and midsize companies are hiring. 

There is ongoing demand for flexible staffing. The percentage of temporary jobs created in the U.S. in this cycle is double that of the prior one, 13.2% versus 6.5%. The pace of temporary staffing growth in the current recovery also has been faster. 792,000 temporary jobs were created in the 39 months ended December 2012. In the prior recovery, it took 56 months to add 513,000 temporary jobs. 

As of the end of 2012, the temp penetration rate in the United States was 1.9%, of total U.S. non-farm employment, which is close to the high point in the last cycle. This percentage is approaching the record high of just over 2% in 2000. There is opportunity, we believe, for the temp penetration rate to expand further based on the secular demand for staffing flexibility we have been discussing. 

Affordable care act: we can legally help [our clients] remain under 50 [employees] since we’re the employer of record for the temporaries we provide to them 

It’s estimated that there are 130,000 firms with 50 or fewer employees, that over half of them do not provide coverage to their employees. 

the data would show that our European operations are bottoming

W.R. Berkeley (WRB)

there would appear to be an increasing awareness of the impact that diminishing investment income is having on the industry’s economic model. While this macro situation is widely discussed, the sense of urgency in tackling these issues seems to vary from carrier to carrier. Having said this, there is an ever-growing percentage of the market that is pursuing rate in an effort to remedy the situation.

On Sandy: the industry received a wake-up call with regards to the imperfections of both cat modeling, as well as local building codes as we endure the impact that a large tropical storm can have on a region.

Workers’ compensation remains one of the lines of business where the market is most aggressive in seeking rate.

The excess casualty market is also showing early signs of a return to underwriting discipline

combined of a 98.1%. However, when one adjusts for storms as well as reserve development, we believe the company is running at about a 96.5%

With every passing quarter, it is becoming more apparent we are entering a hard market. The number of carriers seeking broad rate increases continues to grow, and the minority of companies that continue to act irresponsibly is a dwindling population. While it is true we have not yet reached the point where there is low-hanging fruit, it has been many years since we as an organization have been so encouraged by the market.

The benefits of start-ups are twofold. One, as opposed to buying something, you don’t get someone else’s problems. And two, you don’t get intangible assets on your balance sheet, you get to tax deduct the expenses of building the business, and you don’t have carry forward issues as you go forward.

Ford (F)

In the fourth quarter, total company production was about 1.5 million units, 125,000 units higher than a year ago. This is 13,000 units higher than our guidance. We expect total company first quarter production to be about 1.6 million units, up 160,000 units from a year ago reflecting higher volume in all regions except Europe. Compared with fourth quarter, first quarter production is up 72,000 units.

This was our first U.S public debt issuance in about a decade and took advantage of favorable market conditions to issue low cost, long term debt.

Europe inventory destocking: It’s principally behind us. We still have a little bit of an imbalance…But the majority, the vast majority of the destocking is behind us.

Manpower (MAN)

Revenue in Southern Europe was slightly weaker than expected…Revenue in Italy was down 8%…Spanish market continues to remain soft in the quarter…higher vacation and lower bench utilization in Germany and Sweden, which also negatively impacted the gross margins…We continue to see soft demand within the Swedish market…Japan experienced modest growth…Australia continues to languish…Our business in China and India continue to grow nicely and contribute to the bottom line 

Secular trends in the area of Manpower, Experis, Right, Manpower Group Solutions, and emerging markets are all there. In many cases, the voice of these positive secular trends have been ground out by the cyclical nature of what is occurring, particularly in Europe, but it cannot be underestimated. 

The conversations we’re having with our clients and prospects for the need for agility is translating to much more of an outcome based solutions environment as well as the use of temporary staff to create the agility that is required

Potlatch (PCH)

Our Wood Products division continues to perform exceptionally well bolstered by a significantly higher demand and pricing as the housing market recovers. Furthermore, the division finished the year with its best annual performance in the nearly a decade.

Like we are currently running our facilities at about 104% of capacity due to the amount of over time that we operate the facilities and that’s on a two shift basis.

ACE (ACE)

The x cat [excluding catastrophe] accident year combined ratio was 91.4% 

Book value per share grew about 2%, and our operating ROE for the quarter was 8% 

Our commercial P&C business in the U.S. continued to benefit in the quarter from an improving price environment where we are now achieving rate-on-rate increases for the second quarter in a row, and I firmly expect this to continue. 

From what I see today, I am more bullish about the pricing environment in the U.S. than I have been for some time.

AK Steel (AKS)

Steelmaking input costs, namely coal, coke and iron ore, have fallen, and that will result in significant cost savings for us in 2013. Second, we expect to benefit from increased shipments to both the contract and spot markets in 2013 due to slightly improved overall demand and a greater share of the automotive market.

Nucor (NUE)

New CEO John Ferriola: As we announced on November 16, I became Nucor’s CEO at the start of this year. 

current capacity utilization of just 75% for the U.S. steel industry.

Nucor will continue to be proactive in bringing attention to the critical need for our government to enforce rules-based free trade.

Waddell and Reed (WDR)

Average productivity per advisor continue to increase reaching $44.3 thousand during the quarter, a record’s high. 

We’ve seen a significant increase in the appetite for our equity products and we have not seen a concurrent diminution of the appetite for the fixed income products that had been working, which is to say, the sales are broad based and in that sense encouraging.

J&J Snack Foods (JJSF)

Churros sales were up 33%…Soft pretzels sales however were up 5%…ICEE and frozen beverages, frozen beverage and related product sales were up 4%

Earnings Call Notes 1.29.13

Below are quotes from calls that I’ve read today–snippets of information that I find relevant (typically on a macro/industry level) from companies that I have some working understanding of.  Complete transcripts can be found at Seeking Alpha.

Caterpillar (CAT)

“After a great first half the economies around the world began to slow around mid-year, and as a result dealer sales to end users began to flatten out. We found ourselves with inventory that was too high and dealers also found themselves with too much inventory. As a result dealers slowed orders, and in the third quarter we began the process of scaling back production. Now while production declined somewhat in the third quarter, we took it down much more in the fourth quarter, and because of that we were able to reduce inventory in the fourth quarter. “

“We’ve already seen pretty substantial pickup in construction orders in the fourth quarter. “

“On mining again, we had massive orders, I mean very large orders in mining throughout much of a ’11 and really through almost the entire first half of ’12. That’s when sentiment changed I think in the world economy it was evident, in China it was softer, you had an easing of commodity demand, although, overall mining activity actually did go up in ’12. So, orders on hand were quite significant and over the past six months customers have really eased off on ordering.”

Plum Creek Timber (PCL)

“Lumber and wood panel prices have increased significantly, encouraging lumber mills to increase their output. “

“Mill operators are reinvesting in their mills and some are adding shifts.”

“contractor availability is expected to be a meaningful supply constraint to the industry” 

“Southern sawmill owners are running extra hours to increase production to meet demand, and many are at the point where they are contemplating adding employees and an additional shift to meet the expected demand growth this year.”

“assumptions that we’ll see, 950,000 to 1 million housing starts next year, and we believe for that demand to be met, you’re going to have to see an increase in production U.S. South, and the Southern production right now is about 14 billion board feet, and we expect that you’ll see an increase in production in North America of about 3 billion board feet, and about half of it should come from the U.S. South.”

Harley Davidson (HOG)

“The biggest thing, I think, surprise in 2012 was just how low the retail credit losses were. At 79 basis points, clearly, the lowest we’ve seen in over a decade and considerably better than what we had seen in 2011.”

“we think as far as the consumer is concerned, that they’re starting to shift their behavior a little bit. We may see a little bit higher credit losses. “

“we said, I think, 3 years ago, that we were going to open between 100 and 150 new dealers around the world. As you mentioned, we’re certainly on plan to do that. We believe that there is still opportunity really in every market.”

Yahoo (YHOO)

“talent is fundamental to our success. Attracting the best people to Yahoo! is critical, and we embarked on a number of initiatives to make Yahoo! the absolute best place to work.”

“Yahoo! is focused on making the world’s daily habits inspiring and entertaining. And while we’re starting with unique strengths, exceeding the growth that we aspire to will take multiple years. Essentially, we need to start a chain reaction. First, we need to achieve product excellence and differentiation by launching new revamped and innovative products. With great products, comes user growth and more engaged audiences. And finally, that user adoption drives advertiser attention, spend and, therefore, revenue.”

“Focusing more on the pure advertising and monetization standpoint, there’s greater opportunity with the big 4: Search, Display, Mobile and Video”

CIT (CIT)

“Deposits are now almost $10 billion, representing over 30% of our total funding.”

“I think the competitive dynamics are increasing, as we’ve kind of talked about. There’s the continued focus on loan growth in our competitors as well as ourselves, but we are being very, very disciplined and so we’re going to keep that discipline.”

On credit spreads: “So cash flow still is probably in the 500 (bps) range, plus or minus, depending on the transactions. Our ABL is probably more in the north of the 300. And then some of the ABL market, more of the retail flow stuff is probably in the 200 range. So at least for our core markets, we feel the risk return is still attractive”

“we have 10 (Boeing 787’s) on order. Our first delivery is we have 2 being delivered — or scheduled to be delivered in 2015. So I think — from our perspective, I think it’s a little premature to kind of sort (concessions from Boeing) out. But the viewpoint is that it’s modest in our overall order book and we hope that these issues kind of get resolved because it’s something — the aircraft itself is something that is big in the industry.”

Danaher (DHR)

“I was in China 2 weeks ago, and we spent a fair bit of time on this subject. I think it’s interesting if you just look at our own trends through the course of last year, we really saw quite the bifurcation between our industrial businesses and our healthcare businesses, both LS&D and Dental. We were basically up 20% for the full year, and we saw that strength throughout the year on the healthcare side of the portfolio. We were down nearly double digit the first half on the industrial side…I think when we look at what’s happened in Life Sciences & Diagnostics, we are clearly the beneficiary of a multi-year buildout with respect to the healthcare delivery, particularly in the West but also increased utilization.”

 Seagate Technology (STX)

“For the December quarter, we shipped over 47 exabytes of storage with an average of approximately 823 gigabytes per drive. This reflects a 59% year-over-year exabyte growth, which is well over twice the current rate of areal density growth.”

“Data consumption and creation, along with the increase of global internet connectivity continue to drive petabyte growth at rates that are significantly greater than the areal density growth rate.”

Illumina (ILMN)

“the Illumina Genome Network received orders for approximately 13,000 genomes. Today, interest in sequencing services remains high, including preliminary talks of large hospitals and governments that hope to sequence significant numbers of individuals.”

“we’ve added significant new capacity to our San Diego facility and will open a new lab later this quarter in our Hayward location. This facility, along with improvements to our existing infrastructure, will provide the capacity to sequence approximately 30,000 genomes this year.”

EMC (EMC)

“We are squarely focused on several of the hottest areas in IT: cloud computing, big data and trust.”

“the companies and entities out there understand that cloud and big data are going to change the landscape and if one doesn’t invest in these technologies, their companies will be left hopelessly behind.”

Earnings Call Notes 1.24.13

Like most analysts during earnings season I spend a lot of my day reading earnings calls.  I’ve been trying to figure out a good way to incorporate some of the data that I gather from those calls into the blog.  To that end below are quotes from calls that I’ve read today–snippets of information that I find relevant (typically on a macro/industry level) from companies that I have some working understanding of.  All the transcripts are found at Seeking Alpha.

Raymond James–RJF (Regional Broker)

“assets under management, have gravitated more towards fixed-income and our retail clients have gravitated more to fixed income as in asset allocation. So with all those factors at play, we’re not as sensitive to the U.S. equity markets as we have been in the past.”  

“I think that our investors’ sentiment and our sentiment — investor sentiment survey is up. We haven’t seen a massive move to equities. I know a lot of the funds are showing big inflows. I think we’ve been more with our investors, we try to keep them engaged, maybe they’ve been a little more engaged in other places. So I haven’t seen a big movement yet. But having said that, the commission levels in January have been pretty good so far. I’m a little bit behind in terms probably up to today. But I mean, I can’t say we’ve seen a huge flood into equity since the beginning of the year. “

McCormic–MKC (Spices)

“Globally, digital marketing was 12% of our total spending, up from 5% in 2010.” 

“Our brand marketing plans include further increases in digital marketing, support for new product launches and a sharp focus on retail price points. ” 

“Sandy. While this devastating storm had a limited impact on our sales to customers in the Northeast, it did impact a number of suppliers in this area, which created product shortages during our critical holiday selling period. We also lost several ships of production time in our manufacturing distribution facilities in Maryland.” 

“we’ve had about a 45% increase in commodity cost over the last 4 years and have taken about 25% pricing and we’ve taken a number of different actions along the way, and we are always evaluating the impact of that on volume….and by the way, what we have seen as our pricing has gone up, we have seen those price gaps close now as competition, largely private label, has also taken place increases to either catch up or improve their margins.” 

“About quick service restaurants: I’m following our customers’ releases as closely as — probably closer than you are because they really impact us. But I would say that we think that it’s going to be fairly challenged.”  

“[around the holidays] typically we do see an increase in branded shares for a couple of reasons. One is consumers are less willing to take chances on their meals.” 

Logitech–LOGI (Consumer Electronics/Peripherals) 

“As we discussed in our Q2 earnings call the main factor in our weak performance was a significant weakness in the global market for new PCs. This weakness which had a negative impact on sales in all our PC related categories reflects the combination of the slow transition to Windows 8 and the growing popularity of tablets and smartphones as mobile computing devices.”

Hill Rom–HRC (Healthcare, Hospital Beds)

“Our rental business in North America remains challenging due to continued efforts by hospitals to reduce their operating and supply chain costs. We expect this to continue given the economic pressures they are dealing with. “

Nokia–NOK (Cell Phones)

“we shipped 6.6 million Smart Devices units of which 4.4 million were Lumia devices.” 

“Now more than ever, operators are pushing for a third ecosystem to emerge, and they are committing to more marketing, more training, and more in-store displays to help Windows Phone and Lumia to grow.” 

Grainger–GWW (General Business Supplies Distribution)

“Light Manufacturing was up in the high-single digits; Heavy Manufacturing and Commercial were up in the mid-single digits; Government and Retail were up in the low-single digits; Reseller was flat; Contractor was down in the low-single digits; and Natural Resources was down in the mid-single digits.” 

Symantec–SYMC (Cyber security. Lots of interesting discussion. Worth doing a full read through)

“welcome to the unveiling of Symantec 4.0”  

“despite the fact that we have such great point solutions built mostly from acquisition…We haven’t really integrated the value of these different point solutions” 

“the porous nature by which information is flowing across enterprise, individuals, governments and your personal world. Those boundaries are now taken down.” 

“There was one large pharmaceutical company, and as the CIO was describing his real estate he said, look, we have 60,000 PCs. We have about 7,000 Macs. We have 15,000 iPads and over 10,000 Android smartphones in their environment that he was aware of. And he said what he needs is an offering that allows him to let people use those devices but, at the same time, protect the business. ” 

“while we had the great assets, we didn’t have a strategy or an operational plan to focus on delivering value for customers, and that’s what Symantec 4.0 is all about.” 

Western Digital–WDC (Hard Drives)

“there are early indications of consumers’ stronger intentions to purchase new PCs this year.”  

“The HDD market shipped approximately 136 million units during the December quarter, slightly less than the 140 million units we anticipated in our guidance.” 

Apple–AAPL (Fruit company?)

“Apple is in one of the most prolific periods of innovation of new products in its history.” 

“We have now sold well over 0.5 billion iOS devices” 

“The pipeline is chock-full, I don’t want to comment about a specific product, but we feel great about what we have got in store.”

Netflix–NFLX (Pay TV Channel which happens to be distributed via internet)

“Both the rise of tablet phones and the rise of smart TVs are very helpful to us, and they are really the beginning of a trend along Internet connected ecosystem devices. And certainly the more convenient those devices get, the more people will feel comfortable watching and enjoying content on a wide range of devices, some day including Google Glasses, Internet Watches all kinds of scenarios over the next five years and as well as multi-screen scenarios, where you use your tablet or phone to chose content on the TV. “

US Airways–LCC (Airline)

“several years ago, we started talking about all the things the industry needed starting with consolidation. Included on that list was management teams that care more about returns than market share. Included on that list was a better management that work better with labor. And I think all those things, we’ve made huge progress on. Also on that list, though, was a better understanding by the government of the importance of aviation and a national policy from a national aviation policy from the government, and that hasn’t happened. And that’s next on the list, and that’s where the rest of the value, I think, is going to come from, Jamie, and where it needs to come from. We’ve got — everything I’ve talked about so far is self-help, and the industry had to do a lot of this to get itself right, and I think we’ve made huge progress in that regard. But we’re fighting our own government on a lot of issues, and taxation is high on the list, but there are other issues. Other international carriers don’t fight the same battles we do, and we’re — well, the playing field’s not particularly leveled.”

BHI 4Q12 Conference Call Notes

From its 4Q conference call, Baker Hughes outlook for oil services market in 2013:

“Now let me provide some final thoughts on the year ahead. While we see a reduction in North America onshore spend led by continued weakness in pressure pumping pricing, it will be more than offset by growth in the Gulf of Mexico and in international markets. And what I like about that is that half of that increased spend will be in drilling and completions product lines.

The task of finding and efficiently producing oil and gas is not getting any easier for our customers. We all know that — about the challenges of maximizing recovery from deepwater reservoirs. And while much has been said and written on the abundance and real potential of unconventional reservoirs, the fact remains that these reservoirs present their own unique set of challenges for our customers, ranging from environmental to economic to operational. Harvesting both unconventional and deepwater opportunities in the future will require customers to leverage a portfolio of leading-edge products and services and basin-specific expertise from their service providers”

Comments From FCX 4Q12 Conference Call

Some comments on the outlook for the copper market from Freeport McMoRan’s earnings conference call:

“in today’s world, we’re seeing in our business, some degree of improvements in markets in the United States, in the Middle East. China shows promise this year for renewed growth, as they – China spends on infrastructure and take steps to improve its economy. Construction in the U.S. is growing.”

Tupperware Commentary 2Q12

An interesting take on the world economy from Rick Goings, CEO of Tupperware, an extremely global company:

I spent a lot of time this last month doing not only big group but one on one meetings with the investment community, not only in the United States but more and more focusing on Europe where people tend to hold longer. And but one of the key questions I’m asked almost everywhere I’m, is people want to tap into what are we seeing out there and what do we hear out there?
They understand that the bulk of our sales and profits are outside the U.S., which by the way is only 5% of the world’s population and this is an important question because the perspective one has, if they are getting their news from Wall Street Journal, Financial Times, CNBC or even many U.S.-based analyst reports, one would think that the world is in chaos and it’s bleak out there.
And yet, we just did a review and quite frankly, our perspective is there’s more firm places, more (inaudible) firm out there in the world and things look pretty good and look better than we’ve seen in years. Here’s a brief scan.
In Europe, contrary to what you may read, Europe is not going to fall into the Mediterranean, although it sells newspapers. Politicians there are showing a never before level of commitment and flexibility as they work to hold euro land together. And they are driven by two major things, the desire for peace and economic necessity.
But I do the review and I say well, CIS under Putin, Medvedev, Russian style but it works and we feel good. Nordics look good, Germany looks good. We get down into Turkey, looks good. Greece, who cares, it’s too small, Italy, 66 governments since the Second World War, its stability Italian style.
And then we turn it up, Benelux looks good and it is interesting in France, even under Holland, an interesting perspective. Most of the dramatic changes in governments with regard to repositioning government spending to be less happened under mid land who was an extreme left wing. So we, because he had the ability to bring the assembly within, so I feel, okay, about Europe.
Turning to Latin America, a few topline points in major markets, I already mentioned about the PRI in Mexico. So I feel good about that. In Venezuela, it appears Chavez’s grip is slipping, plus he’s sick, Brazil, fifth largest population in the world, sixth largest economy in the world and a real bright future.
In Asia, finally, 40% of the population, China, India, Indonesia and the driving force is going to be the explosive growth of their middle class, which is going to move from $500 million to $1.7 billion by 2020. In each of these markets, importantly, we have been awarded the status Superbrand. This is interesting, because we’ve never advertised.
Now, I know when somebody reads the recent talk of China’s economy slowing, two things are important to remember. Number one, it’s still growing at 7.5% and number two, the government which is very directive has been proactive with the stimulus and matter of fact, they cut the borrowing rates to stimulate the economy twice in one month.
So, net-net, before I turn it over to Mike, a final thought. When you put it all together, we’re confident in our portfolio and our future. We’re not going to hit on all cylinders in every quarter.