Miscellaneous Notes Week of 9.17

posted in: Notes | 0

Stronger than expected turnout at Credit Suisse Basic Materials conference

John McNulty – Credit Suisse Analyst (From Dow Presentation Transcript)

“Okay. If you all take your seats we’ll get on with the presentation for today. Yesterday was a big day for us actually for what it’s worth, those keeping track, I mean, the rooms are certainly more full than we’ve seen them actually. We are – attendance was up about 45% for our first day, yesterday. So apologize if there are logistical issues, because it’s a bigger crowd than even we had expected, but it’s a nice problem to have.” –Credit Suisse (Investment Bank)

Sirius’ CEO was bullish on car sales

Jim Meyer – CEO Sirius XM

“I spend a lot of time with the senior executives in the automotive industry and all of them along with me are pretty confident that what the next six or 12 months looks like in auto sales. And we see them continuing strong.” –Sirius XM (Satellite Radio)

40% of millenials do not have a TV and 20% say they are considering cutting it

Lowell McAdam – Chairman and Chief Executive Officer

“40% of millennials do not and have never had a TV in their home and another 20% have said they have got it, but they don’t use it that much and they are considering cutting it.” –Verizon (Telecom)

Verizon doesn’t think Apple’s installment plan is a threat to them

Lowell McAdam – Chairman and Chief Executive Officer

“They love to have people stay on iPhones forever. And if I look at it from our perspective, from a cash flow perspective, it is – it’s a relatively positive, marginally positive I guess. So, it’s not a threat. It’s similar. I think about it the way I think about bring-your-own-device, which we have been doing for quite a while. Apple today is a very small piece of our distribution. So, it’s not going to shift the way we do business in anyway. And right now, it doesn’t look like a threat to us.” –Verizon (Telecom)

Fifth Third echoed that credit remains benign

Tayfun Tuzun – Chief Financial Officer

“We are operating at very low levels of charge-offs in historical terms and ongoing quarterly improvement every year in charge-offs will be difficult to achieve, but nevertheless credit should generally remained benign.” –Fifth Third (Bank)

You have to optimize your business to perform well over the course of a whole cycle

“If there is one lesson that we as managers have learned during the crisis it’s the importance of relentless focus on through the cycle performance. Business models created for the present part of the business cycle that are not grounded in long-term fundamental value creation will outperform for a period of time, but will not increase the value for shareholders who have longer time horizons, as they are now sustainable.” –Fifth Third (Bank)

Sustainability is the key focus

“I wish I could tell you that it is possible to tailor our strategy in a very timely manner to every turn of the business cycle, but it is not. Therefore sustainability has to be the key focus. Our top goal is to perform well throughout the full cycle.” –Fifth Third (Bank)

Necessity has been the mother of invention in driving more efficiency in the oil industry

Bob Gwin – Executive Vice President-Finance and Chief Financial Officer

“necessity being the mother of invention that, I think, is largely true across industry. Very proud of our folks driving efficiencies, working very hard to drive down costs, increase in our oil production everything operationally has gotten better. Now that obviously for a macro perspective, continues to put pressure on commodity prices as we see the resiliency of U.S. production. But our view is that we’re going to see that – we’re starting to see it roll over a bit and that – in this era of prices with this double dip and without a real strong outlook on the underlying commodity, we see that the need to continue to focus on cost and the need to continue to focus on driving returns” –Anadarko (E&P)

The focus is on returns, not growth

“The focus right now is not on growth, it’s on returns. We don’t look at growth as being a deliverable that’s going to be valued by the market or by our shareholders, rather growth will be – the growth rate will come out of the capital allocation work that we do” –Anadarko (E&P)

HCA thinks of itself as the preferred healthcare provider in the markets they operate

Bill Rutherford – Chief Financial Officer

“we want to be the preferred healthcare provider in the markets that we operate and we create what we think is a high value integrated delivery system. It’s anchored by our hospital network, supported by outpatient centers, ambulatory surgery centers, we have 120 surgery centers, outpatient imaging, physician clinics, we employ close to 4,000 physicians in our marketplace, freestanding EDs and urgent cares. So, we deploy access points in the marketplace. So, there are multiple ways patients can access the HCA network in multiple service dynamics. And then we develop deep service line capability generally organized around patient conditions in cardiology, in women’s services things or orthopedics, oncology, neurosciences, emergency room and we developed deep service line capability.” –HCA (Hospitals)

We may get more medicaid expansion post 2016 when it’s not so politically charged

“I don’t see much movement until post-2016 election, once we have someone else as President and the office maybe Medicaid expansion becomes something that’s more state-driven rather than considered Obama Care.” –HCA (Hospitals)

An exchange enrollee is worth much more than medicaid

“the one thing you do have to remember as Bill pointed out, our significant benefits have come through the insurance exchange. I mean if you just look at the pricing differential on what you get on an exchange enrollee versus a Medicaid enrollee it’s three times on an exchange. So remember if we get one exchange to three Medicaid, we benefit substantially more.” –HCA (Hospitals)

Union Pacific is optimistic that ex-energy volumes look not too bad

Rob Knight – CFO

“And as we look at the macro, it actually sort of — I think it speaks to what we’re seeing at the macro level, clearly the energy related activities are a drag on our volumes right now. But the rest of our business volumes are ever so slightly and we’re very cautious, we’re not getting exuberant here, but are on the positive side of the volume trends. We’re watching very carefully, things like our intermodal business. Our intermodal is roughly half international, half domestic. If you look at our third quarter numbers, our international is down about 7%, our domestics flattish, and what we’re seeing in our international space and our intermodal world is a cautiousness, as people are cautious not to build inventories too high.”

“We think the peak season that we would normally experience is a couple of weeks still in front of us, so we would hope to see some improvement in that space, if that holds. While we don’t think it’s going to be a rocket ship kind of peak. We do expect it’s going to build, but there is clearly some cautiousness in the space with people not wanting to overbuild inventories and I guess [indiscernible] away we would feel about the macro economy cautious, steady as she goes, things are positive when you separate all the energy challenges we have.” –Union Pacific (Railroad)

Twitter is full steam ahead under Jack Dorsey

Anthony Noto – Chief Financial Officer

” we’re focused on what we control which is executing on the business, we haven’t missed a step since the transition to Jack, we’ve been full steam ahead.” –Twitter (Social Media)