Microsoft this morning, the company beating on the. Top line, but missing on the bottom line. Microsoft telling investors it ames to get its nokia unit breaking even in two years. We will have more on that in just a couple of minutes. As for apple, revenues fell a bit short. Asia, a key part of the story, ceo tim cook told analysts the companys performance in china was honestly surprising and we will have more on the streets reaction to apple in just a kup couple minutes. In the meantime, im going to send it over to kayla. A lot of moving parts in that. We are watching a number of other stocks today. First up, video game publisher electronic arts. The company is hosting better than expected earnings and revenue egz. Results were helped by strong sales such as titan fall, original revenue and cost control. That stock after hours and yesterdays trade down by 0. 5 . Ju juniper, meanwhile, below expectations. The network gearmaker citing delays in Closing Sales deals at some north american commerce. Juniper shares premarket, down about 5. 3 . Software provider vm ware which has been in the news lately because of its majority owner emc getting targetsed by activists, that Company Getting betterthanexpected earnings. Revenue necessary line. The companys management point to go Strong Performance across the business and ta stock up slightly after that announcement. Broadkro m, chipmaker earnings beat the street. It is counting down its cellular base ban business and cutting 1 of its total workforce. Broad comes ceo told analysts they tested the company for a possible sale but decided to shut down the unit instead. Elsewhere, lower than anticipated revenues due to weak sales to telecom era space and defense customers. It is forecasting weaker Current Quarter sales. You can see that stock down after hours, 9 . Mixed results across the sector, joe. Let me just do some world markets. I want to get a sip of mine what have you got there . Nutrition and delicious herbalife shake this morning. Mm. Mmm. So delicious and so nutritious. Great product. 25 did we get on that whew how many slides . I dont remember. We kept going back to it every half an hour. 250 slides, werent there . We kept going back to it after half an hour expecting to get the smoking gun and the big reveal. I could see cramer going because it was basically like that old wendys commercial. Is there any beef here or is it all on vacation, it was hamburger helper. You dont even use beef. And you dont really need the beef. He needed the beef yesterday. Not only did the stock go up, but ackman said he spend 50 million for the investigation. So costs coming ow of the woodwork for this. Hes turning around looking. I think hes turning around looking at the stock price going up there. Wow, 66. So it came down when he was talking about what he was going to do on monday. And then it went up. I like their candy bars. Andrew is sitting back in his cheer which means he has some fully formed thoughts about this. Well, no. The major problem was that he came on the day before and told us this was going to be the presentation of his lifetime. Of his career, yes. And he never uses any hype in any sense. Was that a function of the fact that he thought if he didnt say that, nobody would build up the expect ages . Or herbalife that he has been going after for probably years. Maybe i understand why he was debt practice there was some stuff, but it was not great. But if you were the fcc you might actually look at it and go, oh, okay, not that its going to put the company out of business. Can you buy herbalife products with hong kong dollars, do you think . I remember. People dont remember the 400 slides on he delivered a lot of alpha on that. On or can you trade hes going to be mad. We love him. But can you trade in any of those jp pepny buttons for a do you have any of your buttons left . Im going to go on ebay right now. That one is going to do it. Lets check on the markets. We havent talked on the air about your potato. That sounds dirty, but your potato is something that you bought yes, from people who watched our coverage during sun valley, pioneers, the sun valley saloon. And i love them. And they love you there. Nobody gets a table there except for buffett and except for buffett, actually. The wait was out the door, hours long. So we were happy to even get a table. And you said your eyes were bigger than your what you ordered. Because your eyes are big in general, like i said. Which is frequently a problem for me. Berger and a baked potato. Finished half of it. Sorry to interrupt. If we can all put in together and get 47 jcpenney 2012 buttons, thats the year i believe this all happened for . 9. 99 on ebay. We can then take those buttons and trade those buttons for one milkshake or candy bar. Ill let you do that arbitrage. They do not have a kale shake there or a tofu type its all meat. You havent been to the pioneer . Ribs, its all good. And the Carbon Footprint is you go out there to line your arteries, basically. You do, to cause more methane from the farting cows. I just bring packets of herbalife. You do. Our producers, they had so much planned. Theres the dow jones up 14 points. Yesterday we ended up at 17,113. It was a pretty good session overall and it had all the dow components, six of them that reported yesterday. Well have a lot of obviously earnings coming up today. Are you doing the 11 again today . Four hours of tv again today . Yeah. Four hours . Four hours. Okay. Dont tell people because then they wont watch. Theyll be so tired no, they wont. Carlos slim, i can tell him right now, no way, 3 1 2 hours. But then you go home and watch in your pajamas. Meanwhile, you tweeted something, a picture of the moon. It did not look early on what you tweeted, like you were getting up so early. Thats the problem with camera phones. It was dark outside. It does get really dark, but were still close to that solstice. I saw the moon hanging right above sullivan avenue. And i thought what a great picture. Theres a lot of stuff happening between now and the opening bell. You know what i saw right now . Hes not wearing a jacket and he you know, he was talking to his coanchors and making jokes that only he thought was he thought they were funny. And i watched it. And it was kind of like outdoors . I felt like i was right at home. Asia squawk box is good. That or housewives of i dont know, somewhere. My first hit ever on cnbc is on asia squawk box, 2010. January. Look at the hang seng, up only 0. 1 . Saying theres nothing happening anywhere else. Here is the oil markets this morning. We are not dominated today by these two ghee your political i mean, things arent settled yet in gaza. I dont know whats going on in ukraine. You are seeing the euro lower, though. The euro did hit 1. 35. There was fear that in an already slow growth region, any further sanctions, anything more stringent coming out of europe could have some negative effect on the economy there. Gold, ever since taper tantrum, not a lot has happened in gold. And, you know, i got no satisfaction from kayla about ricky fowler coming on. As joe said, hes 25. How can you not know him . Hes 25. I must know every millennial. Hes awesome. Is he the next tiger . He might as well be. Is he better . Better right now. He was only two off rory mcilroy. When you play four days, two strokes, he could probably find 20 times where if it had gone way or the other i wish he was going to be on. But i think hes down at middlist. Anyway should we talk about israel . Yes. Bloomberg is going over there. The u. N. Secretary general says there is no time to lose in reaching a ceasefire. Meantime, air carriers n United States and europe halted flights to tel aviv yesterday saying they wanted to ensure passenger safety as turmoil in the region intensifies. But Michael Bloomberg says that is a mistake. In a statement yesterday he said he was flying to tel aviv on an israeli carrier. Fwloomburg argues the flight restrictions is a made, that it underser underserves whats happening. It strongly urging martin to change course and allow flights to tel aviv. Andrew, good morning. Those words by bloomberg very welcomed here by the israeli government. They are very angry at the American Airlines beginning that 24hour ban on flights here. That led to a domino effect. Will a dozen European Airlines stopped their flights. That emphasizes how easy it is to isolate israel. Its a killer by the israeli tourist season. So the Israeli Ministry immediately said when the ban was announced, youre rewarding terror. And the Prime Minister appealing to the faa to overturn that ban. It may be overturned soon. Since the Israeli Ground invasion, the number of rockets that have been fired from gaza into israel has been dropped by more than a half and theyre using more short range rockets because of the pressure theyre under. So it actually, if anything, ae alleviate the pressure. But, of course, you cant ignore what happens yesterday, which was that one of their rockets fell within a mile of bangorian airport and that clearly spooked the airlines who are already nervous enough after the shooting down of the malaysian planes. That was a react that hit the israelis hard. It emphasizes their isolation and its a victory for hamas. This is who have had several victories, actually, over israel certainly perceived victories in the fighting. The tunnels, israel says theyre going to keep fighting until they destroy those tunnels. Now they emphasize israel needs to continue fightling and until they put that threat. The u. S. Secretary general is here trying to get israel and hamas closer together in what they would have said for a ceasefire. What appears to be cooking is a shorter term humanitarian ceasefire, socalled, a cease in the fighting without 48 hours and then the gist that hoped to build on that to end the fighting. But the two sides, israel and hamas, are so far apart that it seems unlikely theres going to be any quick solution and the only thing that really is likely at this moment is more fighting, deeper penetration by the israeli army into gaza and heavy fighting. Two more israeli soldier res killed overnight. So it is a toll on israel with more than 650 dead. Its enormous. Martin, thank you for that report. We should note, were going to have the ceo of delta on. Delta was one of flights that had a flight airborne and rereportr rerouted that flight to paris. Youve got commercial flights going in and out, it almost seemed like it happened without really looking to see, like martin just said, there are fewer rockets sitting now, now that theyve stopped them, and evaluate was probably more dangerous last week or two weeks ago than when it is now. But when you have one hitting a mile from the airport, its that was yesterday, too, wasnt it . Yes. So the damage was a mile from the airport. I mean, on the nightly news, kate snow was standing in the rubble and you could see the airport in the distance. And you cant need a at 33,000 feet if the plane is a mile from the airport. Thats 2,000 feet or very close. And youre coming in slow. Lets talk about microsoft and apple. Apple posted a smaller than expected 6 rise in revenue for the quarter. That was the good news on the profit side it was a different story. Joining us route it now. Dan earnst. Lets talk about apple fist. I was most spliced about ipad sales which i had no idea that was showing down. Ipad sales start to slow in the First Quarter. Tablet sales overall fell 3 in the First Quarter on the idc numbers. So the segment did phenomenally. It overtook laptops pretty quickly, but its just the productivity tools, education tools arent really there yet to make it a widespread, you know. As a business analyst, i love it, i use it all the time, but i can see the wider spread usage is going to be constrained. Cook talked about those two issues with the neon he specifically tim, on the phone call, was talking about the business segment. This announced that deal with ibm. How much does that really help . I think the ibm thing will take time. One of the things they talked about on the call was they were very pleased as you can see microsoft finally bring office on to the ipad. Which as you said, its a twoyear wait. So i would say most of the comments area around tablets and ipad, i think, are very current backwards looking. I think were still going to see growth there, but its going to be hard to see. And i think when we see that, well be able to judge by the tenyear track record and say you have to have four new categories. Longterm, the tablet overtakes the laptop, cannibalizes the laptop business. Correct. At a lower margin. That remains to be seen. I think that overall, probably cheaper to produce a tablet than it is a notebook. Am has been in the notebook business a lot longer. One more apple thing and then well talk microsoft. When you think about the next generation phone, which is really the only thing anybody cares about in terms of how this stock looks right now. People are looking at a 4. 7 inch screen and a 5. 5 inch screen. And what that portends. And for the tablet business. Because once you start buying 557 inch screens, that in my mind people that used to have a phone and a tablet decide im going to carry one thing around. I dont think thats true. I think for productivity, an education application, i dont think you can use a big phone. But youre right, investors are more focused on the next phone. Screen size knot a structural barrier. People for two years, say its on a bigger screen. Then make a bigger screen if it matters. Thats not a structural issue. Much more important fox nrt five, ten years to apple is not whether they can make a bigger iphone because thats ed easy. Its what is this new application and thats going to be more important to the earnings and stock than the phone will over time. So now apple and i about bm is trying to corner up with microso microsoft. Im just wondering who you think gets there first given that you have apple and ibm in one corner and microsoft, which has a long way to go in the other. Either way, its terrible for blackberry. So well slow that out there. But i think microsoft has done a fantastic job in productivity now as what they call their core focus. They did a fantastic job in transactioning to the cloud. Commercial clouds revenues up 47 . But they have a lot of work to do. The stocks up 47 over the last year. Apple is up 60 . But we can clearly see theres new categories coming, theres new products come with apple, with microsoft buying nokia. Theres a lot of execution risk in how they handle that. Id be very surprised if we see them in that business five, ten years from now. This will ultimately end up looking like a mistake. Let me give you two comparative numbers, apple versus microsoft. Apple just did 37 billion in he revenues, thats 47. 5 billion in operating costs. Microsoft had 22 billion in revenues and 9. 5 billion in operating costs. So apple almost doubled the revenues, half the operating costs. The Hardware Company and a Software Company so that kind of gives you wbl in terms of the work that microsoft has ahead of it . Are you arguing that microsoft is undervalued . No. Clearly, they were weighing out the foundation for cloud. It wasnt like a secret and were seeing early success. But im just saying from here, the next leg for microsoft, the execution risks around nokia and the layoffs is going to be harder than it has been. What do you make of the nokia piece of it . Thats correct. And i think that ultimately, that will prove to be a mistake. I understand they want to be in mobile. And from microsoft to be in mobile in scale, it seems like its understanding the media. Its easier to use the office ipad on this than it is on my windows 8 laptop. We have to run. Target prices on microsoft and apple before you go. Were looking over a 12day, tomonth period for 1110 on apple, which is about 15, 16 times. So a market multiple for and quickly on microsoft . I think its probably fairley valued at this level. Were going to leave it there. Thank you. Thank you. Okay. This says i was born in 1988. That was rory mcilroy. But you, if you started dating ricky fouler, it would be right . Yeah. Thats not normal. No, no, no. I was just reading something about he started, played in the tournament when he was 4 1 2, did not win. But then he started playing more and more tournaments, and he finally won one at 7. Thats when he got a coach. So between 4 1 2 and 7, finally one won in seven. Coming up, another twist in the food scandal in china. Shanghai xlis detaining five. Heem in an investigation. Theres been reports that old and rotten mate was supplied to the chains and then they cooked them up and sold them. Whirlpool fell short of earnings estimates. Due to what it kals customer inventory transitions. This is in china, too. It was in the china market. Squawk box will be right back. In new york state, were changing the way we do business, with startup ny. Weve created tax free zones throughout the state. And startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure. Thanks to startup ny, businesses can operate tax free for 10 years. No property tax. No business tax. And no sales tax. Which means more growth for your business, and more jobs. Its not just business as usual. See how new york can help your business grow, at startup. Ny. Gov welcome back to squawk box on this wednesday morning. Five people are being held in shanghai related to a fast food scare in china. Eunice yoon joins us now with more from beijing. Good morning, eunice. Good morning, kayla. Mcdonalds ceo don thompson said on an Earnings Conference Call that he and the company felt deceived after hearing about the Chinese State report which allegedly showed food safety violations at one of its suppliers. There are a lot of people who feel that way now. The regulators and the authorities have said they have detained five people in conjunction with this case, including the chief of the shanghai unit as well as the inspector. The regulators said they believe the food violations were organized by the company and not in isolated incidents as was suggested by osis management back in the United States. Now, so far, the authorities have said that theyve seized 1,000 tons of suspected Meat Products from the factory. Theyve also taken 100 tons from osis various customers. This Company Supplies mcdonalds as well as yum brands, which supplies kfc, but many others, burger king, ikea, subway, and those companies have issued statements trying to distance themselves from this company. Overall in terms of public opin