Miscellaneous Earnings Call Notes 1.21.16

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Delta Air Lines’ (DAL) CEO Richard Anderson on Q4 2015 Results

Lower crude prices put pressure on ability to drive revenue growth

“it certainly push additional pressure on getting to a positive RASM result and we made those comments this morning based on where the four sit today, but clearly crude were to fall another 15%, 20% and some people are calling for over the next few month that will put incremental pressure. These are good trades and we’re happy about crude continuing to fall, but we want to make sure our investor base understands that we appreciate the importance of getting the positive RASM”

But we’re pretty optimistic on the demand environment

“We’re pretty optimistic relative to what you read on CNBC or Wall Street Journal or some of the thunders out there that are predicting the future. We are booked ahead in terms of load factor for each of the months for February, March, April and really add into early summer, in case of early summer, its little bit early to call that, but we see demand is very strong”

Ed Bastian

Corporate Demand is also strong

“Let me add to that, because we also see as I’ve said in the remarks, continued strength in corporate demand. Our corporate demand in the fourth quarter was up 3% across the Board. Obviously, internationally it was down a bit in Europe given some of the effects of the Paris attacks. But broadly speaking our corporates continue to tell us that they expect growth in 2016 over 2015 level.”


Morgan Stanley’s (MS) CEO James Gorman on Q4 2015 Results

Significantly restructuring the FICC business

“we give more details on the FIC restructuring. Given the cyclical, and in some cases structural challenges facing fixed income, driven by the work ” and Ted did at the end of last year, we took the decision to downside headcount by 25%, along with our ongoing balance sheet and capital focus. We took this action alongside the recent installation of a new management team with the objective of credibly sizing of the business going forward.”

We’ll sell the assets opportunistically

“On the exact timing of year-end and the trajectory year-end 2017, I can’t really help you. We’re going to do it opportunistically. We’ll do with sort of minimum damage. We don’t want to get rid of assets on a distressed basis. We have some natural roll off. So we feel very comfortable with these targets. And it’s fair to say we haven’t disappointed in the last few years. That hasn’t been an issue in FIC.”

Our balance sheet was too big in the business

“As it relates to the capital with just arithmetically, if you run these numbers through the models, it does actually free up that much capital. It just means the business doesn’t need that capital. Our view is that we were overcapitalized that our balance sheet was too big in the business given the revenue and business opportunity.”


Interactive Brokers Group’s (IBKR) CEO Thomas Peterffy on Q4 2015 Results

Discussing some funky dynamics in treasury markets leading to short term treasury yields below fed funds

“in this quarter, we booked unfavorable marks in our treasury portfolio. Unlike most of our peers, we do not own or are we owned by a brand, and as a broker, we must mark our treasury portfolio to market, while they do not. This quarter, the negative marks amounted to $52 million. For the entire year, the marks were negative $33 million. Our treasury portfolio is $16 billion and its duration is about one year, the longest instrument being just less than two years. The yields on the two year averaged 1.06% on the last day of the year. It reversed from there to 87 basis points as of today. The safest way to secure our customers’ cash is to hold treasuries. It is also our understanding that according to the new banking regulation, these type of financial deposits this year will have to be secured by treasuries even of the banks which may result in a squeeze on treasuries. Indeed, we see treasuries maturing within three months currently being traded well under the fed fund rates.”


Brinker International’s (EAT) CEO Wyman Roberts on Q2 2016 Results

Saw considerable regional variability

“It is important to note, we saw considerably more regional variability during the quarter than we’ve seen traditionally. Some parts of the country performed significantly better than others, though none as strong as we’d like. Chili’s is deeply penetrated in areas like Texas and Louisiana, they’re dealing with economic pressures linked to declining oil prices.”

Tom Edwards

California, Florida and Midwest did relatively well

“In contrast, two of our largest states, California and Florida perform relatively well for the quarter, as did our more Midwest focused franchisees highlighting some of the regional variability we have been seeing.”


Logitech International’s (LOGI) CEO Bracken Darrell on Q3 2016 Results

Demand exceeded supply for iPad Pro accessory

“The bright spot for us in Q3 was the strong sales of our CREATE keyboard for the iPad Pro. Demand exceeded supply during the quarter due to the strong initial reception.”

Even though the PC market is shrinking, PC usage is not declining

“even though the PC – the PC market continues to decline 11% this quarter, if you look in front of you, most of you – if you’re in your offices probably have a PC. So the PC usage actually is not declining like that at all. And so as a result, people are still using PCs.”