Transcripts For CNBC Squawk Alley 20161018 : vimarsana.com

CNBC Squawk Alley October 18, 2016

Million subs, compared to that guidance of 2 million. The company beat up earnings in revenue. Reed hastings last night talking about competition on the call. We had a great couple of years at these price points and theres a lot of competition entering the market. Were focused on increasing value by having more spectacular shows so that people watch more of netflix. Lot of analysts are struggling how to value these guys. Is it a cash flow story . Is it a mushy hit maker story . Whats your take on this . How do we know what where its going to go. People were short the stock yesterday. Obviously were seeing major shortcomings. Carl, i think youve actually frame this had correctly. This is an unbelievably difficult company to analyze quarter to quarter. I have a rule of thumb, never bet against netflix or Reed Hastings. That said its extremely difficult to forecast whats going on here. Essentially the u. S. Has reached some kind of maturity and the rate of growth there is modest at best. And the cost of the programming designed to keep the customers in is rising. So, those two things you sit there and go, wow, that will be hard for the stock. Good news, though, is that they have very low penetration overseas. In this quarter they show Enormous Growth in new subscribers overseas. Thats the really, really, really good news. As i said, these guys have shown themselves to be smarter than people expected, literally from the beginning. There hasnt been a fluke about anything theyve done. It was a tiny Little Company going into a world dominated by cable companies. Its blown them all away. Whats really impressive is that at least to me remember how we used to talk about this idea that the smart phone market had gone from an adoption phase to adaptation, where the rest of the economy is adjusting, there are very few companies that have adapted to the universal ownership of smart phones better than netflix. Overseas, that is a gigantic advantage to them, the fact that people can use tablets, phones, can use apple tv in any device thats out there to watch programming. And i expect them to be successful. I dont see how you get the bumps out of the road, though. From quarter to quarter, i think this will remain tough which makes it a hard stock for me. They have been investing for that Tipping Point overseas. Hastings says material global profits are what he expects as soon as next year. Is that enough to hang your hat on internationally . Im saying for me as an analyst, i like stories where i can when i make a bet thats out of favor, i get a pretty good long ride out of it. Historically, netflix has been able to deliver that. Ive never been able to get the pivots, those inflections right. I think hes correct. The international markets, they will be more successful there than the skeptics think. To me, the real question is that their costs come in, in advance to the revenues. Theyre making better and better stock will remain volatile f youre a trader and like to play things that way, this will remain an attractive stock. For me its just too volatile. The real question is, though, by the end of 2017, netflix should be approaching 100 million dploebl subscribers. Yes. Who are paying every month. Varying amounts but paying for the service. Once you have that loyal base of users and subscribers in this mobile economy, what more can you do . Amazon isnt amazon just because theyre good at selling books. Amazon is amazon because jeff baytos had this vision that once you can make this based on data you can do so much more. Whats that next leap for netflix, from mailing out movies to streaming, what more can they do on that Subscriber Base of around 100 million . Carl, let me ask you a question. Did you see smart phones as a viewing platform coming two or three years ago . I sure didnt. And, you know, at that time, the band width constraints in the cellular world were such that having high quality hd viewing experiences was a dream not a reality. Now its a reality. Did you . Did you see it . No, i didnt. Honestly im impressed how well they made that transition. I would not exclude the possibility that one size fits all. Ill give Reed Hastings having understood this market and his team better than anyone else who is out there. All the disadvantages that theyve had, theyve overwhelmed by just being smarter than other people. I do think they have a chance to be smarter about pricing going forward. So i think getting to 100 million really matters. And i dont know that thats necessarily the end. If they make programs that are attractive enough, theyre going to get paid for it, the same way that hbo has. Right. One last thing on this, before we move on, in a word, do you believe that subscriber data and Machine Learning can make them better programmers . In other words, better creators of hits than your traditional Legacy Network . Definitely. Theyve already shown that, indisputably. All right. Well see where that takes them in the future. Next up, roger, samsung setting up Exchange Booths at airports around the world, hoping to stop people from bringing the phones on flights. Letting owners swap note 7 for a new phone with employees on hand to transfer all your data. Theyre available before security screenings in australia, korea and in some places like San Francisco. If i had told you this was coming a couple of months ago, it would have been hard to believe. Right. Carl, the airport is the absolute point of the marketing breakdown for samsung right now. Its the point where everybody is reminded that has a Samsung Phone that youre going to be singled out to have to, i dont know, put this thing in a fireproof bag, wrap it in asbestos, whatever you do. Everybody who doesnt have a Samsung Phone is reminded i dont know what model that is but its not samsung and i dont want it. Hopefully theyll be success skesful swapping out these phones and people that have them will see this as a positive interaction because it could help turn this around for them. Is there any way they view this as a positive interaction . No yeaway. If the service is really good, dont you think its possible that people who are samsung fans and loyal say thats nice they swapped out my phone here. I wanted to use it on the flight . Its better than getting on the plane and getting shamed or stopped at the gate, even worse, and being without your phone when you land on the other side. Getting on the plane and having your phone blow up, its better than that. I dont think its better than anything else. Sadly, samsung is creating a new Business School case, replacing the pinto as possibly the worst handled consumer interaction on a product failure. I dont think weve seen the end of this. Im with carl on this. This is an unmitigated disaster. Putting this thing in airports is just going to say if samsung, then problem. I suspect this is the first part of this story that might have a Ripple Effect into their other product categories and, you know, i just i feel really bad for them because they have made a lot of very, very good products but people cut corners on this one. Theyre being you know, the people who bought the products are being punished horribly and the company will be, i suspect, carrying the legacy of this for a long time. And i really dont see a good, happy ending to this at all. I mean, look, its a big company. This is not going to kill them. I was going to say. Theyre very smart people. Theyre going to figure this out. This is going to hurt their smart phone business which, lets face it, they were the worlds number one and they were making a lot of great products in a row and they had a lot of happy customers. This is a horrible reminder that people who were sloppy, you know, can cause a lot of trouble with technology and thats what happened here. But this recall, roger, has been going on for weeks at this point. How long do you think it will actually take them to collect all of the galaxy note 7s that are out there. If people have been paying attention to any type of news, they would have known that this was happening and yet still theyre having to put these kio kiosks up at airports. As weve seen in some other areas of our life, politics and other places, that some messages take a long time to get through. And, you know, in this particular case, you know, this became you know, you go on the internet, the number of meme images, making fun of samsung and exploding phones is so large that i fear that even when the recall is done and all the phones are gone that the memory of it will last a very long time. Would have been easier had it been a mediocre phone. People love this had phone. The best reviewed phone. They dont want to let it go. I didnt personally try it but the reviews were off the chart. They were. People dont want to let it go until they have to. If you like this, youre going to love the note 8. Exactly. Now with fireworks. Roger, thanks so much. Good to see you again. Some Economic Data moving the markets this morning. Steve liesman is back at headquarters with a rapid update on that, steve. Kayla, we have a debate on wall street about the just completed quarter strength of growth and rebound in the Third Quarter. I want to see the cnbc rapid update. We are the only ones who put together the tracking forecasts. Unchanged after the Inflation Numbers this morning. Look at that range there, folks, 1. 9 to 3. 1 . Pretty big range, pretty big debate about the strength of the just completed quarter on wall street even though the quarter is complete. 2. 4 is the forecast for the Fourth Quarter and the actual Second Quarter which was 1. 4 . Moving down morgan stanley, 2. 8. Happy to welcome bank of america to the forecast. 2. 7 and much followed atlanta fed at 1. 9 . One more chart. We tracked the atlanta fed over the quarter versus cnbc rapid update. Atlanta fed started much higher and disappointments on the consumer stepped it down. Cnbc rapid update because it has more people in it tends to be more stable and didnt start as high. You have this debate our number, 2. 6 , atlanta fed much followed gdp number at 1. 9 and still, carl, a bit of data to go. Clearly it looks like the best we can do is a mediocre balance, bounce back looks like its fading in the rear view mirror there. Steve, thank you for ta. Sure. Steve liesman. Lionsgate says it will produce a new live show based on the game candy crush. Joining us live, plus a strong gain for goldman and new ceo at visa. What you need to know about both companies. Well talk about big blue when squawk alley continues in a moment. There are many things you dont want in industrial strength like cologne. Morning but theres one thing you do. gags its called predix from ge. The cloudbased Development Platform thats industrialstrength strength upgrade your phone system and learn how you could save at vonage. Com business did you know your business doesnt have to suffer from slow internet . Comcast business now offers blazing fast internet speeds up to 250 mbps. Over 6 times faster than dsl. Get internet for as low as 59. 95 a month. Call today. Comcast business. Built for business. Did you know sharing wifi with your customers could leave your business exposed . Only comcast business offers wifi pro. Two separate networks one thats private for you, and one thats public for your customers. Upgrade to wifi pro for only 19. 95 a month. Call today. Comcast business. Built for business. Financials are in focus this morning. Goldman sachs and visa. Those two Companies Moving in opposite directions. Visa, of course, you may know by now, Charlie Scharf announcing he will be stepping down december 1st, saying he can no longer spend enough time in San Francisco to, quote, do the job effectively. His family is based in westchester in new york. He will not be receiving a severence package. He does not have a noncompete agreement. He told investors he will stay on to assist with the transition to visa board member and former member at american express, alfred kelly. The company said no change to the business outlook. It will discuss that in more detail when it announces earnings on monday. Shares have been surging throughout the morning after Third Quarter earnings on the top and bottom lines. Thanks to strong gains in trade ing revenue. Bank of america during this earning season. Profit surged 58 last year saying, quote, we saw solid performance across the franchise that helped counter typical seasonal weakness adding that the bank continues to manage its Balance Sheet conservatively and is benefiting from the breadth of our offerings to clients. Another thing mentioned, brexit could drive market share to the u. S. Banks, which are in a relatively strong position and marcus, their online lending platform will provide more information when they have it. They just underwrote their first loan last night. Some wondered whether or not the results were so strong that the argument for going for a more consumer oriented Product Offering is less important now, right . Because trading was so robust. It is so cyclical and so choppy. You never know what events are going to drive clients to you being able to see goldman benefit from its own Balance Sheet, not having to sell loans to thirdparty investors which is something that lending club and others are struggling with now. All right. Up next, a day in the red for big blue. Not a great day for ibm. Shares falling despite tax assisted earnings. More on that when squawk alley comes right back. Can a toothpaste do everything well . This clean was like pow it added this other level of clean to it. 6x cleaning my teeth are glowing. They are so white. 6x whitening a i actually really like the 2 steps. Step 1, cleans. Step 2, whitens. Every time i used this together, it felt like leaving the dentist office. Crest hd. 6x cleaning , 6x whiteninga i would switch to crest hd over what i was using before. Crest. Healthy, beautiful smiles for life. Shares of ibm, Third Quarter results for the top and bottom lines. On the positive side, software did well, up 3 . Thats the core revenue and the classic ibm model. Newer offerings like Cloud Computing and also Artificial Intelligence saw growth. Now the bad news is that the past three months mark the 18th straight quarter of falling revenue. Company cfo was on closing bell yesterday, talking about the future and growth and watson. Take a listen. Watson is, for us, the future of cognitive. Its not just watson platform. Its showing up with how we deal with our health business, in. R its how we see the future of cognitive within ibm. If ibm had a dollar for every time they talk about watson making money they would have more money on the Balance Sheet than they do now. Looking ahead to intel, chip maker report iing earnings, getting an up grade at barclays. Intel indicated this looks better than expected. Thats a contrast from last year when people had a lot of pcs in the channel and had to get those out before the oems could sell. I think the question is, when the intel talks about the Holiday Season and beyond, is the emphasis on low inventory or higher demand . Higher demand would be better news than just saying, hey, there arent a lot of pcs on the channel. Well have a better q4. Wouldnt necessarily be pointing in that direction but they also havent for a long time. Thats right. Overall, those numbers are not looking strong for the pc market as a whole. In the u. S. , though actually, the pc market looking healthier. Corporate pc market benefiting players like hp. U. S. Laptops doing pretty well. Thats why intel is interested in getting the likes of Michael Phelps to try to entice people to buy pcs. We had a new commercial featuring that olympian, of course. It would be nice to layer demand on top of that. Certainly. Well get that today. Donald trumps recent comments about a rigged election is sparking debate about whether the countrys Voting Machines are safe from tampering. Aditi roy is live in San Francisco and has been taking a look at that. Aditi, what did you find . Hi there, kayla. Good news is that one expert we talked to says the possibility of digital tampering is remote since most machines arent connected to the internet. Research shows the Technology Behind most of these machines is grocery outdated. 43 states have machines that are at least a decade old according to a nonpartisan policy group. 33 states have accepted help for cyber scan and most machines are running on Outdated Software like windows 2000, according to gregory miller, cofounder of the ocet institute which works with Election Officials to update infrastructure. The largest problem here is the pcbased equipment is built upon technology that is not only a antequated, its flatout obsolete. Spare parts from asia and Software Patches from eastern europe. Three Main Companies provide a vast majority of Voting Machines for u. S. Elections. They are es s, dominion systems. But theres Little Market incentive to innovate, given the lack voting Machine Technology is outdated, trumps accusations of largescale voter fraud dont hold up. Recent study at Loyola Law School cast between 2000 and 2014 and found only 3 instances of voter fraud. That is a very low percentage. Aditi roy in San Francisco, thank you. Lionsgate announcing a new show based on candy crush coming soon to stant. Your 3 oclock is

© 2025 Vimarsana