Miscellaneous Earnings Call Notes 10.21.16

Hasbro’s (HAS) CEO Brian Goldner on Q3 2016 Results

Strong POS trends

“So you’re right, Drew. We are in fact seeing really strong POS trends entering the fourth quarter, particularly in the US. We saw a little bit of softness in POS in the late summer, July, August period. And then in September given the shift in Star Wars as well as the impact from Jurassic, that impacted our US POS. Internationally, we’re seeing very strong POS, up double digits, in Europe, up in Latin America, up year to date in Asia-Pacific. And then in the quarter in Asia Pacific, particularly in Australia, recently we’ve seen some retail issues with a retailer where there was just less inventory taken, and a little bit less of a sell-through and therefore impacted that HAPM number, the Asia-Pacific number because of Australia. So overall we feel very good about the POS trends year to date, and the POS trends going into fourth quarter, with a little bit of a note in the third quarter due to some of those timing shifts and some of the brands that have come down significantly versus year ago.”


Kansas City Southern’s (KSU) CEO Patrick Ottensmeyer on Q3 2016

Brian Hancock

Mexican customers very aware of peso changes

Chris, this is Brian. I would tell you that for the customers in Mexico, as they look at the peso, that impacts them significantly. And many of them have asked us price in peso and we have done over the last 18 months. There is still a significant portion of our businesses that is priced in dollars because it’s more of a global basis. But we watch that as they do as well. And we’ve tried to do everything we can to make sure that each other understand where the peso is, how it’s impacting the business.”


UnitedHealth Group’s (UNH) CEO Stephen Hemsley on Q3 2016 Results

Medicaid has been ACA’s biggest success

“Medicaid has been a very significant success of the ACA and wherever that has played out, those markets have actually been more stable and better performing. And Medicare continues to be a core program of the country and that funding for both Medicare and Medicaid is something that we have been advocating consistency and stability of it. Kind of those themes are what we have stayed with. I think commenting beyond that, particularly as new administrations take hold and so forth, our posture is to be very constructive about making the marketplace work most effectively and serving the most number of individuals and making that system simpler and more usable for everybody. So I think beyond commenting on that level, I don’t think we are going to get into what’s going to happen going forward on either a state basis or federal.”


Regions Financial’s (RF) CEO Grayson Hall on Q3 2016 Results

Large customers accessing capital markets to pay down bank debt

“Regarding business lending, average loans are down modestly on a year-over-year basis. We continue to experience muted customer demand and heavy competition in the business segment, particularly in the middle market commercial and small business sectors. We are also seeing some large corporate customers’ accessing the capital markets and are using these proceeds to pay down bank debt”

Barbara Godin

Mortgage delinquencies getting back to all time lows

“Yes firstly they’re all within our risk appetite so we’re very comfortable with what’s happening in the consumer book. What we see is real estate continues to improve in particularly we see home equity was down significantly this quarter. Mortgage is really back to with all-time low tracking along the bottom. Some of the other portfolios that we see indirect is pretty stable.”


Burberry FY 2Q17 Carol Fairweather – Chief Financial Officer

Did see a slight improvement in US but still challenging

“In terms of the U.S., in terms of our plans to turnaround, clearly the U.S. market does remain very challenging. It’s an 80% domestic market for us and both domestic and tourist remain down. That said, we did see, and I said just now, we did see a slightly improvement in Q2, but we are still down low single digit.”

Did see improvement in China

“Okay, so in terms of Chinese trends, Luca, what we are seeing is we just seeing an improvement in our second quarter, both at home and when they were travelling. So China, as I said was up mid-single digit or up double digit excluding the rationalization or evolution of the portfolio. ”


Morgan Stanley’s (MS) CEO James Gorman on Q3 2016 Results

I don’t think I’ve ever seen transaction levels lower than this. It has to change

“I think as having watched this business over two or three decades, I don’t think I’ve seen transaction levels lower than this. And just supposed against that that the business had record revenues is a testament to the managed money side of it, the banking side of it, the deposit side of it, things that frankly 15 years ago really didn’t exist to a highly dependent transaction activity. And the world has changed, investors have changed but we’re sitting on $2.1 trillion of assets. And their behavior has changed whether the transaction stuff picks up; I don’t know post the election, post the Fed moving it remains to be seen. My guess is over time it does, I feel just intuitively, it feels like a low but can it go low, I guess it could go low but probably there is a bias to moving up rather than moving down of the next couple of years that said more and more money is going to fee based accounts.”


SUPERVALU’s (SVU) CEO Mark Gross on Q2 2017 Results

Eric Claus

22 states lowered SNAP benefits

“In addition to deflation, Save-A-Lot has been adversely impacted by the reduction of SNAP benefits in 22 states in which we operate, the factor that is compounded by the fact that our level of SNAP sales is meaningfully higher than other retailers. These states have either lowered the amounts paid to individuals or barred them completely from receiving benefits, a fact that has negatively impacted customer accounts and basket size among our customers using SNAP. ”


M&T Banks’ (MTB) on Q3 2016 Results

You’re certainly starting to hear more people worry about concentration limits in CRE

“Well, I think you’re certainly hearing more people worry about the concentration limits. And I think that’s certainly a concern. I read through some of the other comments from other calls and I recognize that’s a concern. We obviously pay attention to that as well. And when we look at where we stand today, we feel pretty good about the headroom that we have there. But I guess the important thing for us is that we try to do business, particularly in the commercial real estate space, with customers with whom we have a long history of doing business. The equity that’s in the deals is still very strong and as strong as it was pre- the last recession or stronger than that.”

Commercial bankers feeling good about the demand that’s out there

“I guess from speaking with our commercial bankers across the region before coming on the call, they are feeling good about the demand that’s out there. You know, as I mentioned before, our pipeline is very, very strong. It’s in line with what we’ve seen in prior quarters. I think there is a little bit of a pause and I expect there will be a pause this quarter, as we go through the election cycle and people digest what that means and with the change in administration.”


Tupperware Brands’ (TUP) CEO E.V. Goings on Q3 2016 Results

Tupperware’s global sales force is 3.1m people

“We are holding our sales force size at 3.1 million. There is really no change from the second quarter.”


Danaher’s (DHR) CEO Tom Joyce on Q3 2016 Results

We have not seen another leg down in industrials

“Yes. Well, first of all, I think we have seen – while not the beginnings of growth on the industrial side, I think we haven’t seen – we have not seen another leg down. In other words, we have seen some stability. ”


Tupperware 2Q16 Earnings Call Notes

Tupperware Brands (TUP) E. V. Goings on Q2 2016 Results

We’ve got a hill to climb in Turkey

“we’ve got a hill to climb in Turkey. We’ve got a large group of sales force, almost all women who she feeds her family out of this business, and we think it’s going to take some time to fix this. The Erdoğan government, and we’ve stayed close to what’s going on there; has been moving ever since he came into office as Prime Minister, have been moving away from the secular culture which is largely, you see, north of Bosphorus. And what was really established by Atatürk after the fall of the Ottoman Empire, more towards an Islamic influence that you see coming out of the government in Anatolia. So we’re watching this situation closely. It’s a bouncing ball. But we’ve learned from the past. We can continue to grow our businesses in areas even when there is major conflicts.”

The terrorism environment in France causes social and business challenges there

“Also, I don’t need to remind you of the terrorism we’re dealing with in France, which is not only horrific, but it causes challenges to the social and business environment there, where it gets harder to get people to come and leave their house, and come to a Tupperware Party. We don’t know what kind of tale there is going to be on this. You’re beginning to see these kind of actions or more the new normal.”‘

Millenials are looking for opportunities rather than jobs

“one of the things that’s really attractive to us right now is the change in the sales force of the pool where we’re really fishing for new sales force and new recruits, increasingly it’s those born after 1980, millennials. More of them has had commented in the past. It’s actually, the number is 58% are not looking for a job, but they want an opportunity. They want more flexibility. They are cost-oriented, and so I noticed this on my trips doing these through countries. Even I would contrast a country like Indonesia, where I start to see, I can be in remote areas of Indonesia, and the millennials there act like the millennials that I see in Berlin. And they’re looking for this kind of an opportunity.”

The Eurozone is important for European peace

“From a personal standpoint, I’ve got to say, Anna, I think the greater concern of Brexit is that, the more – not to get into beyond macroeconomics, but to more the political (01:29:37), we haven’t had a European war since 1945. Euroland may be sloppy, but there hasn’t been a war since 1945. The Balkans was a civil war. And in the previous 45 years before the war ended in 1945, a 113 million Europeans were killed by other European. And so the point is, Euroland finding some way to work together and to be economically tied. I mean, it really does matter. And what you’re good – if you start to see these boarders and walls, we exist there. You started to see rebuilding of CIS and their military, they’re one, this is the direction that he wants to go. It’s not good, overall, for the world. For the next three years, I don’t think it’s going to have much impact. But we certainly hope this is a different direction for the future just for peace.”

Miscellaneous Earnings Call Notes

McDonald’s (MCD) CEO Steve Easterbrook on Q4 2015 Results

Our turnaround is starting to take hold

“I am confident in the actions we are taking and attraction is beginning to take hold. Most importantly, customers are noticing a difference. Our customer feedback systems are showing improvements in many important aspects of the customer visit, including food quality, order accuracy, speed and friendliness.”


Zions Bancorporation’s (ZION) CEO Harris Simmons on Q4 2015 Results

Paul Burdiss

Don’t expect credit deterioration in anything besides energy

Well I mean, I guess the short answer is until we see the non-energy economies start to really fray, but we’re not seeing that we — and I don’t think we’re going to venture a guess as to when the cycle really starts to et cetera, we’ll actually do that but I think suffice to say that at the moment we continue to see improvement and even in markets like, in a market like Texas the non-energy portfolio remains very healthy. We are looking at a lot of indicators in each of those portfolios to kind of watching for problems and so far it is not really showing up.”

Michael Morris

All domains continue to perform well and metrics are all solid

No, I can’t add anything to that, all domains consumer, retail, mortgage, small business, large commercial they all continue to perform well and metrics are all solid.


W.W. Grainger (GWW) Q3 2015 Results

Macroeconomic conditions are well understood

“The macroeconomic conditions faced by our industry in 2015 are well documented and largely understood.”


DuPont’s (DD) CEO Ed Breen on Q4 2015 Results

There is always cost saving

“Look, there is always cost savings. I mean I am a believer that they occur every year in a few percent range, as you keep streamlining your company, I would say. So, you are never done with it.”

Dow is already on IT systems that we were implementing

“we’re on a very fragmented IT system. One of the benefits it looks like we obviously get here with the Dow merger is Dow is on the IT platform that we were going through the global — actually latest revision of the SAP platform”

Fourth quarter was actually our best organic quarter of the year

“It’s interesting to note though that — and I don’t want to say there is a trend here, but our fourth quarter organic revenue was actually our best of the year. We had been running kind of minus 3% through the first nine months of the year and we are minus 1% in the fourth quarter. And if you kind of look at it around the geographies, it was kind of flat in Latin America, flat in North America, pretty flat in Asia and our one down market was Europe which was down about 2%. So, we’ll see how the trend goes here in the first half of the year but that was little bit encouraging that we saw that lift.”


Brown & Brown (BRO) Powell Brown on Q4 2015 Results

Small businesses still trying to understand ACA

“We define small employee benefits as employers with less than 100 employees. For this segment we are continue to see companies be very focused on managing their costs and trying to understand the implementation complexities of ACA, specifically how they manage costs via exchanges and/or private plan.”

Do expect rates to remain under pressure. A lot of activity in M&A but prices remain high

“We do expect rates in ’16 to remain under pressure and are watching the economy very closely for signs of further expansion or contraction. From an M&A perspective there’s a lot of activity out there. We’ve seen a number of announcements in 2015, maybe the most active year of acquisitions ever. We can tell you that prices remain high, some at levels that don’t make sense to us. However, we continue to look for partners that fit culturally and make sense financially”


AK Steel Holding’s (AKS) CEO Roger Newport on Q4 2015 Results

“the steel industry continues to face significant challenges as we enter 2016. These challenges include continued pressures in the global steel industry as the result of the massive oversupply steel primarily from China, that direct and indirectly impact others oversupply in all regions of the world and otherwise AK Steel is not a major player in the oil country tubular goods business, the significant downturn in that market is contributing to the excess capacity in those markets in which we do compete and to the overall steel market. As we have been stating for several quarters now, the steel market in the United States has been flooded with what we believe are unfairly traded imports. While the import levels have indeed began to decline for many of those countries where preliminary duties are being levied, we still face significant ongoing import pressures.”


Tupperware Brands (TUP) CEO Rick Goings on Q4 2015 Results

Turkey very weak

“Turkey, very disappointed. It was down 25% and much like France it’s been heavily impacted by externals, particularly the terrorist attacks, military activity, there is political instability which has just been almost bipolar from the President almost being voted out of office in June to getting a majority back again just over the last two months. So that’s we’ve seen weakened concurrency and there is a lot of change in consumer behavior in spending.”

I might be concerned if I were selling cars in China, but I think we’re ok

“Also I would say in China for all the news you really hear about that, I think if I was selling cars I might be concerned, but at the lower, we’re again a multi-local business, I think we’re in good shape there.”

It isn’t business as usual out there

“we don’t look at it as a crisis but isn’t business as usual out there”


Qualcomm’s (QCOM) CEO Steve Mollenkopf on Q1 2016 Results

Qualcomm talking about strong volumes

“QCT chipset shipments were near the high end of expectations, with low tier strength across OEMs particularly in China, offsetting some weakness in thin modem sales at a key customer. QTL revenues were higher than expectations on strong 3G/4G device volumes and ASPs and we continue to make progress in signing up Chinese licensees, although there is still more work to be done on that front.”

Lots of industries are looking to leverage mobile technology into their products

“At the Consumer Electronics Show earlier this month, it was clear that many industries are looking to leverage mobile technology into their products and businesses are looking to the leaders in communications and computer systems, such as Qualcomm, to make the world more connected and smarter. Our many announcements at the show reflect our progress extending Qualcomm technology into adjacent and new areas, including automotive, IoT and networking.”


PulteGroup’s (PHM) CEO Richard Dugas on Q4 2015 Results

The volatility does change the way management teams think about their businesses at the margin

“All that being said we are well aware of the volatility in the world today. From concerns of our global economic conditions to the swoon in oil prices, to gyrations in the stock market, the day-to-day swings can be violent. The reality is however that we can’t control any of these factors, what we can do is focus on running our business, consistent with the goals we have established and disciplines we’ve demonstrated. This means acquiring well-located communities that we believe can deliver high returns on investment. It also means hedging our bets by using more land options, where possible and focusing in on smaller, shorter duration projects, where we can get our capital back quickly. It also means, not over leveraging the balance sheet and keeping one hand on the lever to slow investment if housing demand begins to change. And finally, it means having the discipline to systematically give excess funds back to shareholders, rather than trying to force investments in the system. ”


Ford Motor’s (F) CEO Mark Fields on Q4 2015 Results

We are a mobility company

“Well to answer your question Joe when you look at where we’re heading we said we were transforming into an auto and a mobility company because it’s really important that we don’t lose sight of our core business as I mentioned on our remarks upfront.”

China is going from an industry led economy to one that’s consumer led

“In China obviously as we mentioned, when you look at the stock market volatility, that’s endemic of the country that’s moving from an investment and industry led economy to one that’s consumer led. And actually when you look at the components of GDP growth there, the services in the consumer portions of that are actually growing while some of the industry ones are coming down and we view that as a good sign.”

Marion Harris

Not seeing any uptick in delinquencies in the US

“Colin, this is Marion. No, we’re really not. I know there is a lot of discussion about this, but with the exception of the trend in longer term financing we’re not seeing any weakness in the consumer alone. In fact delinquencies which are a leading indicator were at an all time record low for us.”


Las Vegas Sands’ (LVS) CEO Sheldon Adelson on Q4 2015 Results

Adelson thinks we’ve seen stabilization in Macau

“We do see stabilization in gaming revenue trends. In the mass gaming segment, our non-rolling drop was down just 1% over the prior quarter, despite new competition that has predominately focused on the mass market. Our VIP rolling volumes were actually up 5% over the prior quarter outperforming the 2% sequential increase in the Macau market.”…”I thought we had either hit bottom in the mass market or we are bottoming out. Ever since I said I’ve been reading the issues, I’m been reading from analyst reports and from other Sands China reports that I get daily, other clippings that people are starting to believe that and some of the numbers put out and experienced through December and January indicate to me that that’s the case.”


Steel Dynamics (STLD) Mark D. Millett on Q4 2015 Results

I think there’s positive momentum

“Well, I think there’s positive momentum, generally. I’m sure Dick can speak to some of it, but the inventory overhang, there’s continued destocking there and it’s becoming balanced. It’s still relatively high, particularly in hot band. But in coated products, in coated sheet, I think it’s getting into a good position. And you speak to a seasonal uptick. I think we’re seeing that as well.”

Theres tightness forming in cold roll sheet

“On cold roll sheet and coated, I sense a tightness forming in that arena. I think it’s a combination of – the automotive arena is strong. So, the integrated mills got a relatively good order book. Construction continues to come back. There’s some destocking going on. And we have some relief from the trade cases and erosion of import levels.”


United States Steel’s (X) CEO Mario Longhi on Q4 2015 Results

Automotive continues to be a good market, appliance and construction markets should also grow

“Now I would like to give a brief summary of what we are seeing in our markets and our guidance for 2016. The automotive market continues to be a very good market for us and we expect it to remain strong throughout the year. We also expect growth in demand in the appliance and construction markets compared with last year. Industrial equipment market is mixed with a slight improvement in demand for construction equipment, steady demand in the railcar markets and weakness in mining equipment. In the energy markets, low oil prices and rig counts remain a significant headwind. At this time, we do not see any catalysts other than increase in oil prices that would drive significant improvement in tubular demand and pricing with impacts to both our tubular and flat-rolled segments. We continue to expect slight growth in the automotive, appliance and construction markets in Europe as compared to last year but tin mill products may be facing increasing challenges from imports.”

Tupperware 1Q15 Earnings Call Notes

Lower growth rate today means more than higher growth rate off of lower base in China

“I occasionally get a question about the slowing economy in China that we read about and other places of the world but to put it in perspective, remember when China’s GDP was growing double digit from 2005 to 2011, they were starting with a much much lower base, so 6% GDP growth in China today which is now the largest economy in the world is worth much more than 13% growth was in 2005. Any rate behind all that were confidence in the growth in this unit and as we mentioned during our analyst day in New York, we see China as a huge opportunity for growth and we’re going to get it by opening new areas and introducing more initiatives to build this brand loyalist preferred customers. ”

Marketing message is flattening as global consumer tastes converge

“so many people believe, well the world is all different. There are more similarities if you get to urban young millennials, you take a urban young millennial woman of 30 years old in Beijing, she is more similar to the same woman in Boston than you would ever would’ve thought in the past. 75% of our product line is uniform all across the world, the same kind of promotions work generally all over the world. And so I think we’ve really opened up the business and I feel good about the plans I see and the execution of those plans”

Export economies of Europe are benefitting from the weak Euro

“this new young Prime Minister of Italy made comments that Angela Merkel didn’t like but he said he’s not sad about the euro’s decline, I think is what 107 this morning Nick and the low oil prices because what’s going to happen, he said, we’re an export economy. This is going to get our factories working again. It’s going to increase our people’s income because we’re going to start exporting these goods that we make, not only automobiles textiles etc. and over time it’s going to be a better consumer environment. I happen to think he’s right at that and how we try to manage the businesses by local markets over time. ”

Don’t build the factory, but have control of it

“we’re about triple the size of a company that when I joined and we have 15 manufacturing units and one of the things we learned best practices we learned from companies like Nike, how they do it. Now 40%, 45% of our products are manufactured outside and we learned to make it a Tupperware factory, we didn’t have to make the capital investment in that and we could still have the attractive gross margins. I’ve often used the example that when Nike went into the golf ball business they didn’t build a factory, they went to – they had the biggest research in rubber and actually in golf balls in the world, at the same time Callaway built a factory. This has enabled us to have more cash flow and that’s what we’re really working for, how do we keep looking at our business model new and differently so that we can return more to shareholders. “