Flextronics FY 2Q15 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Continue to see the macro environment stable

“In terms of macro environment, we continue to see it as stable. Our guidance also reflects this.”

Don’t see any major pullback in technology space

“I think our visibility has not changed very much and I consider it to be reasonably good. We have not seen a big pull back across the industry. I know some company has made a lot of noise about it. We just haven’t seen that evidence, don’t know if we are going to see that later or not but just based on what we can see and our expectations, we continue to see a very stable environment and we just don’t see the evidence of any kind of major pullback.”

Networking and server business down 0-5%

“We see the group somewhat down like a 0% to 5% kind of thing on an annual basis in terms of the data we see in the marketplace. We are trying to offset that by really going after more customers in China, where we already have a pretty good position. We are trying to offset it by going into the appliance manufacturers”

Connected home

“connected home, we have a whole range of technologies and wireless technologies that we are now taking and putting into our number of different customers products in order to get them smart and connected into the whole engineering of things.”

Wearables

“I think I mentioned earlier we probably have about 25 customers in variables. We do everything from sensors, to glasses, to fabrics, to wrist bands, to watches, to a variety of different product categories. And what we are focused on in that place because you mentioned the capabilities, that’s actually what is important in wearables in our view. I don’t think anybody really knows what the consumer preferences are going to be on consumers and our wearables in the future. What we are very, very focussed on is the underlying core technologies associated with wearables. And these are things like — and we probably had 30 patents in materials and methods and advanced manufacturing processes and technologies over the last 12 months.”

YOu have to solve a lot of problems to put together a wearable device

“the reason they are differentiating is you actually have to solve plastics problems, you have to solve circuit problems, you have to solve very traditional electronics problems all simultaneously. And the fact that we have more techs effectively, we have a big mechanicals operation, and the fact that we have really, really broad electronics ecosystem really gives us the tools that we need.”

McKesson FY 2Q15 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Generic price inflation may be coming down a bit

“we believe that some of our second quarter inflation was pulled slightly ahead into the first quarter. Our outlook for the year remains unchanged, down slightly from the inflation rates we experienced last year but still pretty robust.”

We’ve been surprised by the strength in Hep C volumes

“We have been surprised by the strength of the hepatitis C volumes. And they come along with lower margins, as I intimated. Without those 2 hepatitis C drugs, our margin would have been right around the 250 basis point level for Distribution Solutions.”

German, French and Brazilian markets have been challenging for Celesio

” think stepping away from Celesio specifically and looking at the markets, clearly, there is continued price pressure in Germany, in the wholesaler side of the business, and which I think the industry has been talking about for some time. Clearly, the French economy has not performed at the level that some would have had expected. And there’s additional pressure in that market. And Brazil has been a challenge for many of the companies that are competing in the Brazilian market.”

Not everyone is affected in the same way by inflation and reimbursement pressures

“I think it’s interesting when you talk about customers because each one of our customers experience their business in an individual way because they’re a mix of payers, their view of inflation, their contracting processes, how they price their book, are all different. So I think it’s difficult to lump everybody into a giant basket and say this is how they’re being affected”

People who are saying that purchasing scale has not yielded benfits may be people who have something to lose

“I would point out that there are many voices in this discussion. And the voices have different objectives perhaps. And that maybe the objectives of some of those voices is to try to make sure that these purchasing collaboratives, cooperatives, joint ventures, whatever you want to call them are not successful in aggregating volume because it may be to the disadvantage of other people in these channels. And so I — all I can speak to is the fact that we continue to get the benefits that we had expected as we entered these arrangements. “

Facebook 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Three year plan is to grow the existing business

“Over the next three years, our main goals are around continuing to grow and serve our existing communities and businesses and help them reach their full potential.”

Five year plan is to grow messages

“Over the next five years, our goals are around taking our next generation of services, Instagram, Messenger, WhatsApp and Search and helping them connect billions of people and become important businesses in their own right. One big priority for us here is messaging. And continuing to build and grow Messenger and now WhatsApp as well as great services.”

Goal is to make Facebook a cross mobile platform

“Over the next few years, our goal is to make Facebook a cross-platform platform that allows developers to build, grow and monetize their apps across every major mobile platform. ”

Next 10 years is about pushing next generation computing

“For the next 10 years our focus is on driving the fundamental changes in the world that we need to achieve our mission, connecting the whole world, understanding a world with big leaps in AIs and developing the next generation of platforms, especially in computing.”

Oculus is about the future of computing

“ith Oculus, we’re making a long-term bet on the future of computing. Every 10 to 15 years, a new major computing platform arrives and we think that virtual and augmented reality are important parts of this upcoming next platform.”

Consumers spend 25% of their media time on mobile but advertisers only spend 11%

“Today the average adult in the U.S. spends nearly 25% of their media time on mobile, but advertisers spend only about 11% of their budgets there. One of the main reasons the budgets aren’t moving as quickly as consumers is that advertisers hasn’t yet had an effective way to serve ads and measure their returns on mobile. Current solutions work well for person with one device, especially, a PC and for sales that happen online.”

Grew the workforce by 44% over the last year

“We ended Q3 with 8,348 employees, up 44% from last year. Of the nearly 1,200 people we added sequentially about a quarter were from acquisition. Organic growth was high as the third quarter is our seasonally strongest new hire start period. Overall we are pleased with our ability to attract and retain talented people who enable us to make strong progress against our mission.”

Non GAAP expenses will grow 50-70%

“On a non-GAAP basis, we expect total cost to increase approximately 50% to 70% compared to 2014.”

Expense increase driven by investments

” So, we’re investing in the people and that’s a big part of it. And we’re also investing on the product side to grow the existing products, but also to invest in new areas like Oculus, WhatsApp and then the ad-tech initiatives that Sheryl was talking about.”

Measurement of ad effectiveness really needs to improve for the modern world

“We think measurement really, really needs to evolve for the world we’re in today in many ways. One of those is over emphasizing the last click and the percentages by which that’s done really varies but we think substantially across the industry are over emphasized. But there are also other problems. The current measurement systems don’t work on mobile, because they are largely cookie based. They are not accurate and we think they are only 59% accurate in even the most basic demographic targeting, they just go offline to online. They really work well for one person with one device, usually a PC, thus making online purchases. The world we live in today, I bet you, everyone on his phone call has multiple devices and people look at ads online and then purchase offline, as well as deserve more relevant ads and better targeting. So, as we re-launch Atlas, as we think about investing in ad-tech, we’re looking to solve all of these problems and we think our re-launch is the first step in doing that.”

T-Mobile 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Holding a different format of call

“We are doing something different this quarter. As you probably know, we sent out a very comprehensive Factbook and story of what happened in the quarter to alleviate the need for the long, scripted speeches that you tune out to before you can get to Q&A. So what we’re going to do is we’re going to have Braxton make very brief upfront comments, very factual, and then we’ll going to move into all Q&A. ”

Wi-Fi calling and in-flight texting

“ade T-Mobile the first U.S. carrier to adopt Wi-Fi calling across all its new smartphones at retail. We also boosted coverage by offering postpaid customers a free Personal CellSpot device to replace the aging routers in their homes, and we brought Un-carrier to the skies by partnering with Gogo to enable free in-flight texting.”

ABPU is up because customers are paying for more services

“the ABPU, or average billing per user, that are — is the total amount our customers pay us on our bills, reached its highest level ever in Q3. And that’s not because of price increases. That’s because customers are showing a deep commitment to our products and services. They’re using them more, they’re getting tremendous value from them and therefore, they’re paying us more on their bills.”

Sprint has a scorched earth policy

“We’ve given these amazing experiences to customers, great value proposition, while maintaining a price that allows us to profitably grow the company. We think that’s really important and very, very different from what we’ve seen out of the gate from Sprint in the last couple of months as they got started on their moves. They came in, and I think facing a tough environment, employed a scorched-earth pricing approach. And they said, right there, as soon as the CEO took over, that they were going to have to do that because their network is deficient.”

What’s your next move Sprint?

“And then it really begs the question, what’s the second and third move? We’re 7 moves into this. Our brand is becoming known as somebody that tackles pain points in the industry and frustrations that customers have, solves them, gives them a great experience. How do you follow up doing a $50 unlimited? I think it’s — they’re going to struggle with that, and I think people are going to be a little bit disappointed in the numbers that they post as a result.”

Don’t crash John Legere’s twitter party

“I’ve got to give credit to the handle, it’s @DanielHSQR, credit because he was first in the queue. We want to thank him for that. We want to un-thank him, for he asked 10 questions all at once, dominated our entire screen. He kind of crashed our mechanism here, so we are at least going to we acknowledge you, so everybody can follow you on Twitter and then crash your feed.”

People know our brand now

“Even if people don’t understand every single move we’ve made or would fail our pop quiz, what they do understand is that we are the brand changing wireless for the better. The statistics on that are crystal clear. We’re far and away the brand most famous for this, and we think that’s contributing to our growth and, certainly, was one of the reasons why we had the biggest growth quarter in our company’s history in Q3”

The network is holding up just fine

“we’re the fastest LTE provider in the U.S.. We maintained that position. That was a very marginal decrease in speeds from us as for others, as we work through 3Q. But we’re back again adding more spectrum to our LTE offering and that’s the path forward. The combination with Metro afforded us this great opportunity to build highly contiguous spectrum assets in the mid-band, so more lanes on the LTE freeway”

We’re actually handling more data/user than T and VZ

“we’ve got — we are already with our network handling much bigger use. So we know what that looks like. I think they’re just getting into that zone. That’s a very good question.”

Sprint and T-Mobile aren’t going to just bash each other while T and VZ sit tight

“While it’s a natural, every bone of my body just naturally wants to compete with anybody on anything, we don’t need to beat Sprint down to succeed, right? That’s not — and vice versa. Now there’s a fallacy in the industry that AT&T and Verizon are going to sit where they are and T-Mobile and Sprint are going bash each other over the head and exchange customers. It’s highly likely that what you’re going to find is that’s not what’s going on. So we’ll see how Sprint’s results are, but if I was a betting man, I would bet that the momentum they’re getting, if they’re getting some, is coming from AT&T and Verizon, which is really positive.”

We’re going to go after VZ and T

“we intend to demonstrate with our next couple of Un-carrier moves that if they think their base is secure, they’re quite mistaken. So we’re looking forward to solving some more pain points of the market, focused squarely on some of the disadvantages of doing business with the big 2.”

TD Ameritrade FY 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Fed funds movement has a much greater impact than a shift in yield curve

“It is important to note that a severe drop in the yield curve, like what happened in mid-October, would have a minimal impact to our overall results next year. Since the movement of the yield curve only impacts new extensions, only balance growth prior extensions rolling off the ladder and being re-extended would be impacted. Based on the timing of balances rolling off the ladder in the next 12 months, a 30 basis point drop in the yield curve would drive an approximate $0.01 downside impact to our earnings per share next year.

Remember though, fed funds changes would have a material immediate impact to the next 12 months. For fiscal 2015, we do expect balances to grow 5% to 10% with a potential to see a slight lift in yield. The overall result should be an increase of 5% to 15% in revenue. Finally, the overall extension strategy is unchanged.”

Looking to earn 1.45-1-70 in FY 15

“Our earnings per share range for fiscal 2015 is $1.45 to $1.70 with a pretax margin of 41% to 43%. The variability of results will primarily be driven by trading volumes, balanced growth and interest rates in that order.”

Not sure who came up with the term robo advisers, but it’s out there

“The robo-advisers has certainly got a lot of media coverage. There is no question about that. I am not sure who came up with the term robo-advisers, but anyways it is there.”

There is no way that the Fed pulls out and everything stays calm

“I have said before that basically when the fed starts to pull out, there is no way that they do that and everything is nice and calm.”

The wirehouses have gotten a little better at retaining their people, but there’s always someone who is unhappy

“I do think the wirehouse has gotten better at retaining their better brokers and producers and having said that, our experience is that there continues to be lots of opportunity. And there is always one player, whether it be one of the big wirehouses or one of the independent broker-dealers that is doing something, whether it’s on their payment grids or compliance or something else that causes some people to be dissatisfied and whenever they are dissatisfied they will consider that opportunity.”

Arch Coal 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Even despite a cool summer, utilities are still interested in coal

“Turning now thermal markets, we still expect domestic coal consumption to be up 10 million tons or so in 2014 and that’s taking into account the cooler summer we’ve had in coal concerning regions in the past 30 years. Even with the disappointing summer burn, we continue to see real interest from our customers and layering in significant tonnage for multiple years.”

Some customers are taking coal plants offline in order to ensure that they have enough coal for the winter

“We’re seeing customers who are concerned about rail delivery, take coal plants offline during the season in order to ensure that they have enough coal in hand to meet demand this winter.”

60 GW of coal will likely retire by 2018, 20GW to close next year

“We estimate that 60 gigawatts of coal generating capacity will likely retire by 2018, nearly a third of those plants are already closed. In 2015, we anticipate approximately 20 gigawatts will close, affecting up to 25 million tons of demand on a gross basis”

Met coal markets are bottoming out

“we believe met markets are in the process bottoming out. Benchmark prices are fallen below the cost for one-third or more of global producers and supply cuts are underway. Those cuts will help to offset new supply that is coming to the market over the last several years.”

The railroads are trying to right their ship slowly but surely

“We’re reading everything that everybody else is about the delayed improvements in the railroad, but with our conversations with all the railroads, particularly the western rail roads, we’re confident with the progress they’re making and in terms of capital spend. They’re bringing crews on. That obviously takes time to bring in power on. They’re trying to improve their velocity, but it just takes time. ‘

Demand for met coal in US and Europe does continue to be there

“the capacity factors have hung in there in mid 70s range and we would expect that to continue and with our second biggest market in Europe we’ve also been relatively pleased with the demand that we’ve seen there. Now, we’re not happy with the pricing, but certainly the demand in the U.S. and the Europe continues to be there.”

We feel like we’ve responded appropriately to the market

“I think what you’ve seen over the last two or three years is that we’ve responded appropriately to the market. Sitting here today, we’ve got our portfolio down to pretty strong set of operations and are cash flow positive and as markets move up and markets move down, we’ll address it.”

HCA 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Exchange admissions increase, reduction in uninsureds

“Health care exchange admissions continued to increase in the quarter. We also saw significant reductions in our uninsured volumes during the quarter. ”

Healthcare reform accounts for 1/3 of the growth

“Consistent with our second quarter, we believe approximately 2/3 of our adjusted EBITDA growth can be attributed to our core operations and approximately 1/3 to health care reform.”

A little less than half of health exchange volume was newly insured

“Based on our look-back of accounts previously seen, we now believe about 44% of our health exchange volume was newly insured. The acuity of exchange volume, using case mix as a measure for intensity, is still running about 8% to 10% higher than our managed care book of business. ”

Health reform has been a boost

“The impact of reform has progressed favorably throughout the year, and we remain optimistic on the long-term benefits of health reform. And accordingly, we revised our full year health reform benefit guidance, where we now estimate a full year positive impact of approximately 4% versus our previous estimate of 2% to 3%.”

We’re prepared for Ebola

“Now let me say a few words about the company’s preparation for Ebola patients. We, like most health care providers, have redoubled our efforts across the company to make sure our hospitals and outpatient centers are prepared. ”

A few states may still be up next for medicaid expansion

“I think we’ve got 5 states you all know that have expanded. It appears Utah will be next, so we would expect Utah to come on. Indiana was in the mix, but it appears they have withdrawn their application. Tennessee, we would be hopeful going into next year, post the election, that there would be an opportunity here. Time will tell, but I think that would be maybe the next most likely to consider it. Florida, we’ll just have to wait post-election and see what happens in terms of the new governor and in terms of the state legislature. And again I say new governor, whether it’s the existing governor or a new governor, I think both support it, so the question is really the legislature down there.”

Pharmacy and surgery are two areas that we can get better purchasing efficiencies

“pharmacy and surgery, in particular, are areas where we are moving our supply chain deeper into our operations and creating a better controlled system for purchasing, and at the same time freeing our teams up to interact with our physicians and other clinicians to drive improvement in pharmacy utilization and other type of clinical utilization.’

TRW Automotive 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Consumer auto demand remains robust

“Consumer demand in North America remains robust and supports the current level of production. The third quarter seasonally adjusted selling rate averaged about 16.7 million units.”

China sale trended higher, but softened as the quarter progressed

“In China, vehicle sales and production continued to trend higher. However, signs of softening emerged as the pace of growth moderated as the quarter progressed.”

Autonomous driving is going to come in stages

“I think the path that I have outline, as I will say my personal view is still very much intact which is there are many stages that we will see on the development towards a future autonomous vehicle.”

I think we wont have fully autonomous cars on the road yet in 2020

“I am not yet convinced that we will see a fully autonomous vehicle on the road by 2020, which has been a date thrown out there by some commentators. Basically, because I think there are many things, which are yet to be overcome in terms of the legal, insurance, liability management issues.”

There is some increasing interest from rulemakers

“I think the increasing interest from not only from the European, I’ll say, rule makers [European] which is in the 1780 timeframe, but also now from the US regulatory authorities including – I think they are seeing increased value from some of these technologies maybe there will be future rulemaking. It is unclear at this point.”

I don’t see drop off risk, I see stagnation risk, but that’s not what I’m planning for either

“I don’t see drop off risk. I see the stagnation risk, but that’s not my planning assumption. I think, we are going to see a small steady increases year-on-year for the next two to three years now.”

AGCO 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Softer industry demand

“While our products are performing well in the market, our results reflect the impacts from both softer industry product demand and our resulting production cost cuts.”

Reducing inventory controlling costs

“In response to weaker industry conditions, we are executing our plan to reduce inventory and aggressively control costs. Our team is analyzing all aspects of the business to identify cost savings and to better align our operations with the current market environment.”

Strong harvests are still necessary

“Despite the downturn in the commodity markets, we remain confident that long-term agricultural fundamentals remain positive. Strong harvests are still required to meet the growing demand for food and biofuel requirements.’

Reengineered the business to cope with what’s to come in 2015

“we basically tried to reengineer our business in a way that we can cope with the markets in 2015. We want to take quick and very radical and aggressive steps in order to reduce our cost.”

Trying to take inventories down quickly

“we’re still targeting that we can get our inventories down to level or below last year, at the end of December. So we’ve got a lot of work to do here in the balance of the year. We have significantly reduced our production levels here in the third quarter and the fourth quarter to try to achieve that. Ultimately, it will depend on us meeting our sales targets at the end of the year”

Our business is built to do well in some areas when other areas not doing well, but everything went down at once this year

“Our footprint, in a way, basically, normally would allow us to compensate, let’s say, a downturn in one market by opportunities in another market. So that’s what we saw in the past. Brazil going down, North America going up — or North America going down, Europe going up, things like that. And what we were — what we saw so far this year is that all markets globally went down ”

We’re making radical cuts early to try to get ahead of the events

“I think I would agree to your point that we decided to make severe radical cuts very early, and therefore, we might — I hope that we are a little bit ahead of the events.”

Big strategic Indian shareholder

“I invited Mallika to join the board, which gives us a very good diversification. She’s not only a woman, she has been businesswoman of India for several years, and she is very, very well connected and knows our industry very, very well. And on top of that, she is a woman which also was attractive to us. And then there’s mandatory stock ownership for directors, and Mallika wanted to signalize how much she believes in our business and how much she believes in our strategic alliance and wanted to buy more. In order to make sure that we don’t get into complication here long term, we decided to agree on a standstill agreement, which is 12.5% on the basis of the share count December 31, 2013, and this is pretty much what she is holding out through programs, and she is pretty close.’

Twitter 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Time is a flat circle

“You should think about the size of our total audience as a series of geometrically eccentric circle. At the core, you have our monthly active users. They are our most engaged users contributing and consuming the vast amount of great content on Twitter. Those contributions are the fuel that powers the entire system.

In the circle beyond that, we have the logged out audience on our owned and operated properties. Hundreds of millions of users that come to Twitter every month, but don’t log in. We’ve talked about the size of this group of users as another one to 2X the size of the core and that remains the case.

In the third circle beyond this are the people we reach in syndication via embedded tweets and timelines across the web and now across the mobile app ecosystem through our new mobile developer platform Fabric, which I’ll talk more about in a minute.”

Used ~200m in cash last quarter

“We ended Q3 with roughly $3.6 billion of cash and marketable securities. Cash used in operations was $88 million, CapEx was $101 million, $62 million of which was financed through capital leases.”

Added 3m users in US, 10m internationally

“We added three million users in the U.S. and 10 million internationally. Net ads in the U.S. were in line with Q2, while international net ads slowed a bit sequentially due primarily to the implementation of increased authentication measures, which negatively affected users in a number of APAC countries.”

Timeline views per user down because of changes we’ve made to let people access content more efficiently

“Timeline views per MAU were down 7% versus the prior year to 636 as expected.

The year-over-year decline primarily reflects the changes we’ve been making to allow users to more efficiently access to our content. We will continue to focus on driving the better product experience, which may pressure timeline views per MAU over time”

Timeline views per MAU declined partially because new users use less at first

“If we look across 14 different cohorts the seven most recent cohorts which would be a cohort that just joined in the second quarter although back in time across 14 quarters, the seven most recent cohorts have lower timeline view per MAU than the seven oldest cohorts. But the trend that they show is they ultimately get to the average of those seven older cohorts. And we’re seeing a convergence to that overall number.

It’s just the newer cohorts start out lover and then as they become more familiar with the product, they become more engaged and they actually reach the levels that state that the older seven cohorts have. So it’s actually an encouraging sign.”

OUr strategy is to go after more than just the logged in user base

“Our strategy has evolved over the last 12 months. It’s a much more aspirational strategy and one that can allow the company to be much larger than just going after a logged in user base.”

Largest audience in the world

“we have an aspirational goal having the largest audience in the world.”