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Automatic TRANSCRIPT

We've got McDonald's we've got starbucks. We have a longtime CEO emphasis on longtime reportedly leaving the company that he he founded and we will get to all of those but we have to start with apple. Because Apple's first quarter which is the holiday quarter was everything you would want to be if you're an apple. Shareholder profits and revenue came in higher than expected iphone sales fifty-six billion dollars worth of IPHONE. Sales else yeah. This is the quintessential beat and raise kind of quarter which apple probably needed in terms the stock Devaluation was trading At all time highs in now is a new all-time high a little bit more so it fulfilled A very high expectations and the question. That you know probably will be bandied around will not spend too much time on this house is evaluation justified at this point. Yeah I mean. We'll we'll get to the stock in a second but the iphone sales rightfully so getting the headlined find the. What is the other products category? That's the official named apple gives it the other products Apple Watch Air Pods beats headphones. Ten billion dollars worth of sales. Yeah you can split up the various segments of apple and get a number of extremely large companies and I should just spin off the other products and you'd have a maybe not a maybe not a top top one hundred company in terms of market cap but certainly top two hundred certainly if you were a fortune five hundred s and p five hundred companies. How many could you get out of Apple? There that that must've work has been done a few times the pile of cash is one of them At at over two hundred billion right now is one of the more dominant companies In history is apple's pile of trades under the ticker P. L. C. S. But in terms of the actual business yeah they've got the the various moving parts wearables. I I guess and and home and That being the the fastest growing part today and and so- expectations for for that or are the highest of various things I think that the IPAD and Mac Sales were a little below expectations and there. It would have been a time where that would have been a big problem But today is not that time iphone is still the dominant part the business and and really got the job done Especially in China. So what about the stock well actually before we wrap up on the stock worth mentioning and this is something will return to a couple of times. Today Tim. Tim Cook did talk about China. And I think in most notably showed up in the guidance that they gave cue to the range of guidance was wider than and they normally give and that was tim cook in his team's nod towards the uncertainty in China and rightfully so yeah a bit of uncertainty. Both as is to what the purchasing patterns will be there especially over quarter in our relief. You're looking at apple over one quarter of timeframe you're probably missing a lot of story there but Possibly benefiting a little bit from move to do some of the manufacturing outside of China and really. Yeah this like many other companies is talking has to talk about what the China fact is going to be in his largely answering entering with the you know over the short term. We really don't know over the long term. Probably not much of a problem apple stock has more than doubled over the past year. As you said it's at an all time high as strong as this company is. This really doesn't seem like the data by shares if you don't own shares so going into the day it had moved up from Over the last six months from about seventeen times earnings of over the next twelve months to twenty four times earnings over the next twelve months The next twelve months earnings. Are you know. Always a little harder to Way Than than the actual trailing twelve months so it they're looking at good earnings in the next twelve months and things like China might be more of a headwind than than we know today And giving a much higher multiple on that positive future. The than was being done six months ago. So yeah the the risk here is that the the stock trades a little bit more like the stock usually trades and at some point in the future. It probably will shares of McDonald's up a little bit this. It's morning after a good fourth quarter report. McDonald's prophets were a little higher than expected global. Same store sales were nearly six percent Another company dealing with uncertainty in China in the future in the present. McDonald's closed a few hundred locations agency. But that's a tiny fraction of the number of locations. McDonald's has around the world. Yeah there is certainly a time when McDonald's was looked tat Negatively for not having done as much expansion into China Essay Yum brands which got bigger there faster and earlier than McDonald's. What's but Today that doesn't look like As much of a problem They have to sort of give the same answer today that Others are giving. We'd we don't not really no. We're taking care of our employees and and you know we don't know I I think that for McDonald's it's more temporary sorry a more where permanent hit to actual cash in the bank in that. If you don't eat Adam McDonalds you're not gonna eat more there later hopefully Whereas if you don't go out and buy your iphone today and you really want to you're gonNA buy it And you know in a month or two or something like that so I think that you you know the phones will eventually be built and manufactured and sold and McDonald's. This is a you know when when they're closed for business they don't they don't make that up later. So that said is another good quarter. I think they have highlighted that US sales are an traffic is what they're you're most focused on and I think that is going well the US guest count getting US guests counter. Positive is our number one priority priority new CEO said In in the call. And you know they're they're getting people in they are. Although I get why it's a priority already. You know even though we see the positive comps and they're able to boost that ticket for two thousand nine thousand nine they did. They did see a slight decline in traffic. You mentioned mentioned the new CEO. I think that's also worth highlighting. McDonald's I mean this is a quarter we're referring to him as the new CEO. St I'm sorry because his name is harder to pronounce than Smith I'm GonNa let you take a crack at it. You'll probably get it right but I'm not one hundred percent sure that I'll pronounce it perfectly because because it is not Smith which is I think the only name I can confidently get right all the time Chris. Kempinski is the new CEO. And I think you're right. Yeah I wrote it down phonetically phonetically but worth pointing out that you know they put up. These numbers is a huge company. And they put up these numbers when in the middle of the quarter Steve easterbrook who had been from a business standpoint a successful CEO and certainly from a stock standpoint and he left suddenly and immediately and Credit to Kempinski and his lieutenants for having no time to ramp up as CEO l.. And pulling off this type of horror and we'll see if he can handle it just doesn't smoothly for the next couple of quarters. Yeah they're so so and there is a tendency to give probably my estimation too much credit to CEO Both positively the and negatively at times And we'll see whether McDonalds a an operation owes as much to Easterbrook as would have been thought the case you know this time last year he certainly did a great job and they're in a good position Right now what they're looking at is more for competition from places on breakfast which McCall's got too early while giving more competition to the the chicken sandwich phenomenon That Popeye's got to earlier than The McDonald's so they're rolling out a couple of new chicken sandwiches and they are. I think expecting more competition from Wendy's in the breakfast category so you know a little bit the getting To some competitions You you know. Both sides could and Brad from a headline standpoint starbucks first quarter report KINDA similar to McDonald's in the sense that profits came came in higher than expected they put up global same store sales growth of five percent. That was I think about a half percent higher than was expected and yet shares of starbucks down a couple percentage points and Maybe they're being more aggressive with their guidance. Since with respect to China but if they are it's probably because they need to be. Yeah I think this is where three three now on getting to China being a big part of of today's stories and It is the their fastest growing and I think second largest market and is a major major major contributor to the top and bottom line again when they're shutting down stores which they're doing closing They are losing that money that cash flow and they're not gonNA make it back despite our recommendation that if you have missed some coffee go ahead and drink more the next day right and make sure you're you're you're getting all the health benefits you can. I mean this is this is not make light of the situation but One thing that lives in listening to the Conference Call I. I felt like a little bit. The I thought the did a very good job of just going on again and again again about the partners Being what other places call employees starbucks calls partners and that the starbucks is success was all attributable to the partners and the a special relationships. And all that and and I'm going through as you have and will again the college experience and my feeling going to every single college and hearing their Spiel is what makes that place. Special is the people right and left and I got a little bit of that vibe was through the conference call which you don't typically quickly get There are many. CEO's that Talk about their third grade employees but starbucks is definitely a leader in that category. Oy I agree with that but I referenced. This the other day that I think that how companies doing business in China provide guidance in their earnings report. This quarter is something that bears watching more closely than usual and as a starbucks shareholder. I was happy with the guidance that they gave the clarity. You mentioned Kevin Johnson CEO. I'll also mention Pat Greece Murphy's the CFO just being very clear with analysts analysts about China about closings. Basically saying to the point that Kaminsky made with McDonald's look we're going to update our guidance for for the current quarter and the fiscal year as soon as we possibly can and they're also dealing in an environment where the the state government of China may not necessarily be giving them all the information they want. That is a very real possibility.