Total Energy (TOTZF) Q1 2016 Earnings

Total Energy (TOTZF) CEO Daniel Haylk characterized the oil services market as “dysfunctional”  

“ur first quarter results reflect what is arguably the most difficult industry environment faced by Total Energy since we commenced our operations in 1997. The decline in North American oil and natural gas, drilling and completion activity that began in 2014 accelerated during the first three months of 2016, define the Canadian seasonal upswing in oil field activity that typically occurs during the winter months.  This difficult environment is led to what we have characterized as a dysfunctional market in certain of Total’s business lines. Evidence supporting our characterization includes unsustainable pricing, cannibalization of equipment and willingness to take excessive counterparty credit risks, which in turn is leading to business failures.”

Expects bankruptcies of some of their competitors

“With no clear and substantial improvement industry conditions in near sight, we fully expect business failures in our industry to accelerate over the next few months. In such circumstances, Total Energy has elected to remain disciplined, so as to preserve its equipment base, minimize operating losses and protect its financial strength and flexibility.”

Total Energy (TOTZF) CFO Yuliya Gorbach said revenues contracted substantially from last year

“Consolidated revenues for the first quarter of 2016 were $50 million, a 46% decrease from the first quarter of 2015.  Revenue per spud to release operating day in our contract drilling division during the first quarter was $16,260, an 18% decrease from the $19,888 per day realized during 2015. Decreased day-rate pricing was the primary reason for the decrease.”

Experienced price erosion of their services

“Within the rental and transportation services division, severe price competition resulted in significant declines in equipment utilization and divisional revenue. First quarter rental equipment utilization decreased 61% to 15% in 2016 compared to 38% in 2015.

Despite reducing costs, still not profitable

“Despite ongoing effort to reduce operating cost, a significant fixed cost structure of this division contributed to the fact that for the first time ever this division was not profitable during the first quarter, which is typically its busiest quarter.”

US Bank Q1 2016 Earnings Call

US Bank (USB) CEO Rich Davis said although energy loans remain a small portion of the company’s overall loan portfolio, the trajectory of the poorly preforming loans hurt performance“While our energy portfolio is a relatively small portion of our company’s overall loan portfolio at 1.3% of total loans, the deterioration in this sector has impacted certain credit metrics. This has resulted in a recognition of additional reserves of $15 million higher than charge-offs during the first quarter. I’d like to highlight that excluding the energy portfolio, credit quality for the company remained strong, which was reflected by our stable charge-off rates. Net charge-offs as a percentage of total average loans were 48 basis points, up one basis point from the prior quarter.”

The bank is working on blockchain technology for a host of reasons but namely because they believe it will improve the customer experience

“Certainly there is a lower expense from that and I think the principal reason we are doing is though is from a customer experience standpoint. So, customers who have the need to have a real-time exchange for whatever reason would have that capability on their phone and again, we are one of the first to introduce that. So that’s what it’s about; it’s how the customer is interacting with the bank and with other individuals.”

US Bank (USB) COO Andrew Cecere says the bank is focusing it’s information technology budget on a key few areas

“Our area of focus is in three principal areas. Number one is customer relationship management. So, better information about our customers, both across the retail as well as the wholesale platform. Second is customer capability. So, increasing what a customer can do, not only within a branch, but on their mobile device, as well as on the Internet. And finally, data; data overall. Just using data better in the company for the benefit of the bank as well as the customer.”

US Bank (USB) CEO Rich Davis hoping for one or two more interest rate hikes this year

“We only expect one or two more interest rate increase in the second half of the year in order for us to accomplish what we pretty much telegraphed to all of you. And if it doesn’t, it won’t be Armageddon, but it would be something we hope to get.”

Economic environment in the second quarter looks strong to them

“So we already know what quarter two is starting to look like, and it’s feeling pretty robust. And it’s very much the same things have you seen. Commercial is still strong and growing at that same clip, particularly M&A transactions or balance restructurings by corporate customers. We have got nice growth in home equity. I know that’s a very rare thing, but we continue to grow our home equity portfolio I think against the comps to the other banks. Auto continues to grow. Credit card continues to grow. So we are on all cylinders on loans. Mortgages particularly are growing nicely as they – they didn’t a year ago. So we are feeling good across the board.”

Purposefully not growing the commercial real estate book as much as competitors

“One more thing, Jon, I should have added. I didn’t talk about commercial real estate. That’s flat for us. It’s been flat for us. We are different there too. A lot of the banks are growing that a lot. I said in the prior calls that we want to be very watchful on commercial real estate and we are being – we could be wrong. We could be missing some of the market growth. There’s some pockets of good strength and we are in them.”


Canadian Pacific Railway (CP) Q1 2016 Earnings Call Transcript

Canadian Pacific (CP) Chief Operating Officer Keith Creel said the company performed phenomenally well in a tough economic environment

“In this current very demanding environment that we are living in today it is all about focusing on and controlling what we can. It is leveraging this operating model to succeed. The metrics you see certainly speak for themselves. Double-digit improvements, [speed], locomotive productivity, car miles per day, train length and fuel efficiency both improving by 5%. So all fruits of the hard labor and the execution day in and day out while we improved service and delivered for our shareholders.”

Feels to them as if the Canadian economy is bottoming 

“So that said the Canadian economy though on a positive note appears to be stabilizing and recessionary fears seem to be subsiding. So we do feel that the second-quarter is going to be the bottom. Q3, Q4 obviously are going to be stronger on a demand standpoint.”

Canadian Pacific marketing team is cold calling customers in order to land sales

“Becoming part of our customers’ supply chains, part of our customers’ business offering, help them grow, so that we can grow with them to a point this past quarter, we did over 3000 cold call sales.  I bet CP never did 3000 cold call sales in the last decade. So that is how hungry this marketing team is and as a result of that we have got customers that never experienced CP, we have got customers that are under their own pressures to control cost that are taking advantage of this low-cost transportation service we can provide.”

Domestic economy is good, international is less so 

“From domestic, it’s both Tom, I think the economy is good, the economy is going to help us a little bit but share gain certainly from truck most specifically.  International, it’s sort of a wild card. We had a pretty strong start to the year before the Chinese New Year but things have fallen off a bit since.  I feel much more confident about the domestic piece but we are going to do well in the marketplace.”

Canadian Pacific (CP) Chief Operating Officer Keith Creel said they decided to in-source their information technology systems

“f we don’t have good data if we don’t have good systems to make decisions with around the railway with day in and day out. If our systems crash, we can’t get our report — give us gauges on how we’re doing across the network on a day-to-day basis. It’s challenging. So, since we’ve in-sourced it, we have our own people, we’ve been able to develop our own skill-sets, our own win strength and our own level of accountability; the results have improved dramatically. And it lowered cost. So, again, it’s win-win situation for us.”

Kinder Morgan (KMI) Q1 2016 Earnings Call Transcript

Kinder Morgan (KMI) Chairmen Richard Kinder said they are cutting their spending significantly and are being more selective about their energy infrastructure investments

“We’ve again reduced our expansion CapEx, Steve will take you through that, for 2016 and we expect that trend to continue in subsequent years through both high-grading our projects and entering into selective joint ventures. We expect to fund the necessary CapEx out of our cash flow and continue to improve our debt to EBITDA ratio, thereby preserving and strengthening our investment grade balance sheet.  With respect to the capital update, we announced today a reduction in our project backlog of $4.1 billion, so from $18.2 billion down to $14.1 billion.”

Kinder Morgan (KMI) CEO Steve Kean elaborated on his recent conversations with the mood of executives at oil drilling companies

“I think that they’re being cautious about their next move. I think they want to see generally they wanted to see some additional recovery and see some stability in that recovery. I also think that as a group they’ve made themselves very, very flexible. I mean they are updating their outlook and updating their decision making. It’s no longer an annual process.  It seems like it’s a biweekly process or something now as they’re looking at things which suggests that when they do decide to turn things back up, they’ll be able to turn it back up relatively quickly. But look, as I said before, people signing up for a long term multi hundred million dollar or a billion dollar infrastructure on the producer side, I don’t think that that’s in the cards in the near term.”

Kinder Morgan (KMI) CEO Steve Kean says drilling in Eagle Ford shale which is located in Texas is down substantially from just a few years ago

“We’re not happy about any negative to plan, but I think when you put this in the context of the dramatic production declines particularly in the Eagle Ford, which is down 28% on oil from its peak and 15% on gas and credit weaknesses, our business is really diversified and insulated from the full brunt of the weakness in the producing sector.”

Almost half of the natural gas consumed in the US moves across Kinder Morgan pipelines

“Natural gas needs for transportation and storage services, we believe, should grow over the medium and long term as power generation exports including L&G and exports to Mexico and pet chem and industrial demand continue to grow. Over the last two years, the gas group has entered into new and pending firm transport capacity commitments totaling 8.2 bcf and I think importantly about 1.8 bcf of that was existing previously unsold capacity. And we currently estimate that we move about 38% of the natural gas consumed in the United States on our pipeline.”

Canadian Oil Sands are a more stable supply source for energy pipelines than shale

“They are taking a very long view, producers are taking a long view and they’re finishing out projects that they’re well into and the oil sands become a very stable source of production. It’s not like the shales where it ramps, you get a high ramp up in the beginning and it falls off rapidly, so there’s an actual projection of an increase in production in Canada. At the same time, the transport options out of Canada are becoming more limited. So our customers still want to do this project and we do too and the returns are good.”

Interactive Brokers (IBKR) Q1 2016 Earnings Call Notes

Interactive Brokers (IBKR) CEO Thomas Petterfly said its most profitable clients are hedge funds and traders

“Our most lucrative accounts are hedge funds and proprietary trading groups. Both of these two financially most sophisticated customer types trade and invest for their own livelihood and depend on our very low transaction cost and prime brokerage capabilities for their income. This is the reason it is so very important for us to keep on top of our order routing algorithms, not to sell our order flow, and not to get into conflicts of interest issues by trading against our customers’ orders.  Hedge funds and proprietary trading are our most important customer segment, comprising 4% of our accounts, 23% of our customer equity, and 26% of our commission income.”

Interactive Brokers clients are increasingly based abroad

“From the point of view of worldwide geographical distribution, it is notable that only 40% of our accounts and only 36% of our new accounts come from the United States. The geographic composition of our client accounts have grown from 20% to 22% in Asia and decreased from 52% to 51% in the Americas, and from 28% to 26% in Europe during the past year.”

Profitability will benefit from any further Federal Reserve interest rate increases 

“With a growing customer asset base, we continue to believe we’re well-positioned to benefit from a rise in interest rates. As noted, the Fed’s 25-basis-point increase in the Fed Funds target rate had a beneficial impact on net interest income. And based on current balances, we estimate that a general rise in overnight interest rates of another 25 basis points would produce an additional $48 million in net interest income annually.”

Sometimes customers can be just downright lazy

“Our biggest enemy is inertia. The issue is that most people with a brokerage account do not want to bother with switching it. So therefore, even if they are — even if we succeed in convincing them that they would have a financial advantage, a large financial advantage, by bringing their account to us they still don’t want to do it, because of just laziness.  And most people in Europe already have an account and most people in the United States already have a broker, right? In Asia, it’s the newly rich, the young people who open a brokerage account for the first time in their lives. So they compare the brokers. And anybody who compares brokers can blindly see that we are by far the lowest cost.”

Half of their customers have less than $24,000 in their account

“I, to tell you frankly, I haven’t been keeping track up until the last two years and it’s been holding pretty steady, because the primary cause of our closing accounts is that people run out of money. And you have to remember that, in spite of the fact that the average account size is $204,000, more than half of our customers have less than $24,000 in their accounts, and a third have less than $10,000.”

Hope to one day take care of all of their RIA’s clients compliance needs

“We are working on automating our Registered Investment Advisor compliance set of rules. Because we want to eventually offer to Registered Investment Advisors that we will take care of their compliance needs from beginning to end. We can do some of that right now and we keep growing that capability.”

UnitedHealth Group Q1 2016 Earnings Call Transcript

UnitedHealth Group (UNH) CEO Stephen Hemsley said the company had its highest customer retention ratio in its history

“UnitedHealth Group businesses have steadily strengthened over the last several years and this trend continued in the first quarter of 2016. Our momentum is evident in the highest levels of customer and consumer retention in our history combined with new customer acquisitions driving strong revenue gains across the enterprise; growth in the size, scope and diversity of products and services within our client base; steadily improving metrics for brand and reputation and steadily rising net promoter scores across our businesses.”

Pulling out of most Obamacare exchanges as they aren’t profitable 

“As you know, we have been evaluating public exchanges on a state-by-state basis. We have maintained our regular public dialog with you since November about the individual exchange market and how our own experience and performance have been unfavorable in these markets.  The smaller overall market size and shorter-term higher risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis. Next year we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017. We continue to remain an advocate for more stable and sustainable approaches to serving this market and those who rely on it for care.”

They’ve tripled their number of prescriptions filled by namely acquiring firms 

“today the business is running at over 1 billion scripts annually up from 350 million in 2012. Since we came together our retention rates have persisted in the high 90%s and we are building our largest ever pipeline of opportunities. We were pleased this quarter to announce an innovative partnership with Walgreens to which we are creating a 90 day at retail pharmacy offering.”

Continuing to find ways to drive hospital admissions and costs down 

“2015 marked our seventh consecutive year of absolute reductions in both admissions and bed days on a per capita basis and that’s true across all of our lines of business. But we also extend that work into other areas with particular focus around outpatient because it’s one of the bigger drivers of cost and making sure that we’re driving care to the most appropriate setting and likewise looking at out-of-network spend.”

Using data analytics to also drive down costs and help patients 

“We fire off 131 billion rule-based decisions every month to help close gaps using our tool like Optum One, which you’ve heard a lot about. It’s really crunching and assessing both clinical and claims data to predict where we’re going to see people that need interventions, and those interventions are additive to the tool and how we’ve extended it in terms of being able to action it where we can actually go out and prove where we’ve shown how our interventions intercede in people having strokes, people having heart attacks, and what that saves not obviously is good for the patient, but obviously good for the system. Our revenue cycle analytics actively are taking out friction between payers and providers, speeding up payment, driving more accuracy and improving the financial conditions of both payers and providers.”

Las Vegas Sands (LVS) Q1 2016 Earnings Call Transcript

Las Vegas Sands (LVS) CEO Sheldon Adelson seeing Macau gambling market stabilizing 

“Last quarter, I commented that we are beginning to see the first signs of stabilization in our Macao operations. It is therefore very encouraging to report that this quarter, we experienced our first sequential increase in mass gaming revenues in Macao since quarter one of 2014. Our Macao portfolio-wide mass revenue per day was up 5% sequentially. And at Venetian Macao, mass table revenue per day was up 10%, which is no small feat considering the arrival of new competition.”

Even though their stock price declined during the quarter, they deliberately chose not to buy back any stock 

“We will remain opportunistic in returning excess capital via our share repurchase program. While we chose not to repurchase any stock in the quarter ended March 31, we look forward to continuing to utilize the stock repurchase program to return excess capital to shareholders and to enhance long-term shareholder returns in the future. Our industry-leading cash flows, geographic diversity and balance sheet strength enable us to continue to use recurring dividend and stock repurchase programs, while retaining ample financial flexibility to invest for future growth, and pursue new development opportunities.”

The month of march was disappointing in Macau 

“March was obviously disappointing. We had a really great January, February. March certainly softened up. Worldwide, I think Chinese tourism and consumer numbers are pretty depressing across the globe. And certainly, it was a little bit soft than we hoped in Macao. That was not the case in Singapore, but in Macao, we saw a downturn. But we feel great. Cumulatively in the quarter, our mass revenues, both our premium and the mass-mass side continued to grow.

Not interested in attracting visitors who are looking for cheap hotel rooms and are price sensitive.  They’d prefer to host tourists with bigger pocket books 

“Our focus is not to sell rooms cheaply in Hong Kong to people looking for the best deal. That’s what’s happening a lot in that market is deep discounting where you can buy a room for sub-$100 a day. Our goal and our team’s goal is to stay occupied with mostly people coming from further away, a larger shopping/gaming budget, and I think that’s going to prove to be a very big advantage for us in The Parisian and throughout the entire portfolio. We’re longer doing this, we’re better at it, so we have more experience. And again, we have the convention space as well. So we’re very focused on maximizing our retail non-gaming portfolio in Macao.”

Las Vegas Sands (LVS) CEO Sheldon Adelson reminded investors the casino business is cyclical 

“Everything is cyclical. We’ve been in Macao for 12 years now. And there have been times over the 12 years that people thought that the business is going down, and then it’s going to go up. I remember somebody saying that things are going to hell in a hand basket because the growth that year was only going to be 50% and people were projecting 70%. I mean everything is cyclical. It’s going to change. People that come from China that aren’t coming now will come again.”

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 


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.


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”


“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.”


“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.”