JS Notes: CLB, GM, UNP

Corelabs (CLB) CEO David Demshur believes 2015 will be a trough year for oil production and that growth in oil producer capital expenditures will resume in 2016

“Core’s operations have positioned the company for increased activity levels in early 2016, but we know significant challenges stills await in 2015.”

Corelabs COO Monty Davis says the company’s business model is more stable than other sub-sectors of the oil field services companies due to the capital light nature of their business

“Our prices don’t zoom up as things get tight, because we are not a commodity and so we didn’t have that huge increase, we don’t have the huge decrease either.”




GM CEO Marry Barra says they are cutting back spending in Latin America after the economy has weakened

“Looking at all aspects of our cross-structure, there’ll be production cuts.  I would say it’s really a detailed approach of looking at every single cost, a zero-based budget approach looking at indirect purchasing initiatives where everything is questioned. So, they have really gone to, I say, a very austerity approach in the region.”

GM CFO Chuck Stevens says the company plans on competing in new product categories 

“The biggest drivers in 2015 to 2016 will be launching products and segments that we had not historically competed in like the mid-size trucks, like Chevrolet trucks and other products that we haven’t announced yet plus the improved passenger car profitability.

GM CFO Chuck Stevens says Cadillac is the company’s most profitable brand 

And our expectations are that we’re going to drive better than 20% returns on Cadillac products as we should. They are more profitable than some of our mainstream products.”

GM CEO Marry Barra thinks the “connected car” could be a revenue driver for the company 

“And then as it relates to content, I mean, especially if you look at connectivity. There’s also revenue opportunity associated with the connectivity, and I think we are just starting to scratch the surface as we look at additional functions that can be accomplished now that we’ve got the pipe into the car and that ability to communicate. And we have several initiatives of new features and functions that we’re going to be putting that utilize that. So, I think there’s a revenue opportunity there.”




Union Pacific (UNP) CEO Lance Fritz said his railroad saw a substantial decline in volume during the quarter 

“Solid core pricing gains in the quarter were partially offset by a sharp drop in volume. While we took actions during the quarter to adjust for the volume decline, we did not run an efficient operation.  Over the last few months, volume has shifted negative. As a result, our operation is in catch-up mode and not as efficient as it should be.”

Union Pacific CEO Lance Fritz said weak demand for coal and oil drove declines in volume 

“Lower crude oil prices and unfavorable price spreads continue to impact our crude oil shipments, which were down 38% for the first quarter.  Coal revenue declined 5% in the first quarter. Coal volumes were down 7%.”

While Union Pacific struggles with various commodities, they are seeing continued strength in the transportation of cyclical goods

“Plastics business really ties pretty closely to construction and automotive and all of those and even on consumer side and retail side of house call plastics business was up in first quarter as we mentioned. We think that all of those trends indicate the strengthening North American economy.  We feel pretty good about some of the underlying strength of the economy.”