The japan nikkei was up by another 3. 7 . You see the hang seng and shanghai was up as well. The dax is up by 2 and a quarter . Also check out crude prices which managed to end down by only about 1 yesterday. Up 1. 5 today. Couple big earnings stories this morning. Ibm repeated First Quarter earnings thanks to a double digit increase in arrive from its Cloud Service. Overall arrive falling to a say that again. Falling to a 14 year low. Absolute arrive numbers were what . A 14 year low. Yes, sir. Wow. And how many straight quarters of the arrive decline. Im not going to speak for the company but they would claim some are empty calorie arrive components. But 16. I dont envy what they are trying to do. Difficult, hard work. But 16 straight quarters of arri revenue decline. The Data Analytics and Cloud Business havent been enough to offset declines. On cnbcs closing bell yesterday, Martin Schroeder explaining the transition is still a work in progress. Traumatic investments in r d but that is constantly changing and going towards things like the cloud and block chain and things like watson. Whereas in the past it may have gone to develop and build out new Semi Conductor manufacturing technology. So the shift is ongoing and will always be moving the Business Model to where we see value. And as you see shares of ibm tumbling after hours. I cant imagine that. They beat handily on revenue and by a wide margin. Doesnt matter. Well that goes into what weve been talking about all week long. Whether you lose lower expectations or year over year. Teactual numbers my friend. In the ibm case it went up from 120 something to that was but this is a number that warren, god bless him. But its stock has dropped 17 for instance mr. Yusuf mehdi took over in 2012. Down 17, ibm, up 65 on the s p. As you like to say there you have it. There you have it. However, warren im sure would say if you look at all of the buybacks that have taken place theres been huge value in that. Doesnt help. In the past when it goes down he likes to buy more. His pcentage of how much of the company he owns. He still owns it at 175 the shares that he does have. That makes no sense. The the buy backs dont help you on. Sure. Not in the immediate tirm. The stock price goes up. Bingo. It is not going up. Well look im not long or short a company as you know but i have my own views. The only thing buy backs do for you it lowers the float a little bit. The float. So the earnings per share doesnt look at bad when it keeps going down. Hell own a bigger percentage of the Company Overall even though market cap of the company has gone down in the meantime from where you bought it. But you have to believe the company is coming back if you are going to invest in that position. Its not even big blue anymore. Its petite blue. Is that. Lets talk about netflix. They are topping the streets estimates on every metric. But disappointing guidance over shadowing the streaming giants report. The firm specifically saying it expects to add about 500,000 scribers here at home and that is below what analysts were expecting. Part of the problem is crowding in the space. The only inhibitor is how great is our service . Can we make it so there is never a buffering . So it always starts instantly and the recommendations are incredible and the content is exciting . If we do that well continue to grow globally even though the others are also growing. Their growth doesnt take away from us. A possible head wind for the subscriber growth is the subscription price page hikes in may. Goldman sachs this morning, johnson and johnson. The cfo on johnson and johnson will join us for a first on cnbc a little later. I just cant believe Goldman Sachs is a dow component. It is. It is. Three dow components. The world keeps moving. Is kraft still . Krafts out. Krafts out. Kraft going in is still new to me. Kraft split with i kind of remember healthcare. I kind of remember nike. But barely. Yeah. By the way 2013. You are getting old. I know that. But Goldman Sachs . And nike has been in for three years . September 10, 2012013. Who else went in that day . Visa. How about kodak . They should still be in there. United health, arrive beat forecasts. Company also raised 2016 earnings outlook as well. United Health Points to strong organic growth as well as good customer retention levels. Gop front runner donald trump reorganizing his campaign. Politico reporting pa ining. Trumps former Campaign ManagerCorey Lewandowski will take on a reduced role and reassigned after the shuffle. It is primary day in new york and the candidates continue to duke it out for delegates. In the latest maris pole donald trump is in the lead. And here with more is kelly ann thank you both for being here today. Lets talk about the story on the front page of the journal getting more attention lately and just that fight over the rules for the conventionist. The journal points out today that the party is going to be in a difficult behind explaining that donald trump has the most votes but party rules could allow them to nominate someone else. I think the nominee is going to be trump or cruz. And speaker ryan spoke about that last week and took himself out of the race and said the nominee should be someone whos actually run for president. And speaking the of rules, i think its important to think how the trump and cruz people spent their weekends. The trump people spend their weekends in the trump tower and on tv. The cruz team spends weekdays at conventions winning delegates. The last five contests. But it goes back to popular vote and its the rules of the party that goes with it. You have to win delegates. He has a strong point when he says that more people are showing up for me and the republicans are trying to steal my nomination. So you dont think there is any blow back . No i think it is is playing right to his base. Focus who are antiestablishment, antirnc. I also think the trump people are starting to figure out the rules that have been in place since last august. Actually in october 2014 they were first introduced and solidified about ten months later. Seems like they woke up and finding some of the rules particularly in some Convention States like colorado and wyoming. And i think its important there becky is if you can perform well at the statebased conventions now it portends you can perform well at the cleveland convention. Okay. So well continue to see as this polls on. New york today is probably going to go to donald trump. Cruz has already moved on to pennsylvania which is one of the next big ones were going to be watching. Senator cruz was in new york for a little bit. In maryland. The other thick about new york is winning your home state is sort of a low bar. So easy to do even john kasich did it. And by the way, trump has given cruz grief and rarely chocks off texas is a huge win. There were 12 contests on super tuesday and ted cruz got. Today in new york there is one contest and you have had two weeks to prepare. And look at donald trump, he changed his travel schedule to be in new york for two weeks. His new team said you have to focus. You have to run up the totals in new york. Lets talk the democrats who are running today in new york. Looks like Hillary Clinton is probably going to win but Bernie Sanders thinks if he can get the vote out that this is really going to be something that he has a potential chance an upset. Feeling the bern. He has a chance to do better than expected and hell amass more delegates. I dont think see anything that happens tonight fundamentally changes the democratic side. Hes not going away any time soon though. No. Try to amass the delegates and. Eventually shell get the support. Why . It hasn got an little nasty. Its bickering. There is an open civil war in the republican right now that is a little different. I think in the end the Democratic Party will come together behind their nominee. Bernie sanders is still getting 25,000 showing up on rallies. As you know the race is not won based on the national poll. You are taking a playbook right from the republicans. Hes given the republicans everything to talk about with hillary in terms of money and thats the problem. And her negatives just in that latest poll just in that one month t spread from positive to negative doubled in. Hes hitting vulnerable parts of her and hurting the candidate a lot. If you look at the talk about her for a second. He doesnshe doesnt need a l drawn out fight. Her opponents a 74yearold crazy haired socialist. I mean its im not one that thinks clearing the field and letting her [ inaudible ]. Important development in the last month joe. I completely agree. Hillary clintons negatives have increased and she doesnt seem to be resilient. And the thing about hillary, she cant even benefit from the three advantages that a female candidate usually has down ballot. One they are usually seen as the fresh face. Oh no woman has held that position. Nobody confidences Hillary Clinton for a fresh face. Voters tend to look at and three, female candidates are often seen as more ethical, less corruptible. There is a reason you have never heard the term the old girls network. There isnt one. And she cant even benefit at a basic level from what female candidates usually have as advantages. I love the faces michael is making as youre speaking. If you look at the conversation thats going on in the Republican Party and you look at the conversation that is going on in the Democratic Party, i think it is much more likely that conversation is going to help Hillary Clinton in the fall among women. Well men cant stand here. They dislike her. Distrust her. Dont want her to be commander in chief or president of the united states. You cant run a National General election based on essentially angry white men it is not going to happen unless some massive change at this point half the country is going to hate the person elected. Historic, yes. What ted cruz is doing right now is very smart. The strategy they are pursuing is smart. While trump is trying rhetorically to insulate talking about the system as the system is rigged and set the stage for a potentially contested republican convention. Ted cruz has been out there actually finding delegates and hes been doing it all around the country. Might undermine the whole party. People like trump is they are nodding and agreeing are the 39 hes already got. They are the ones feeling disenfranchised. And it doesnt help get above that. And kasich interesting election i dont know if you saw that. Why is kasich not in the 30s . He should be in the 30 percenti percentiles. Hes been living in new york. Why is kasich still in the race . Well listen the one person to thank or blame is john kasich. You mention ryan saying somebody whos already run for president. That doesnt marrow it down. Might as well be paul ryan. God almighty. Beat hillary in the fall too. Kernan is the white knight. Yeah. Yeah. Coming up an earnings round up and the theme of the morning red arrows for technology companies. Ibm and netflix under pressure. Well do that right after the break. Squawk returns. Actions speak louder. Something well show you. Through small things, big things, and spur of the moment things. Youto get the help yourefar looking for. Big things, thats why at xfinity were opening up more stores closer to you. Where you can use all of our latest products and technology. And find out how to get the most out of your service. So when you get home, all you have to do is enjoy it. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Welcome back to squawk box. Netflix Quarterly Results out. But shares falling after disappointing guidance. Subscription growth slowing. Joining us is somebody. How upset were you about the guidance part . Upset . I have a i wasnt upset. It was somewhat consistent with the theme that it kept me cautious on netflix. That i was arguing we were at peak subscriber growth. For a stock like this it is very much momentum driven. Lots of leverage on subscriber growth. I thought that was a place to be cautious so i stepped back on the stock with a market perform. And i think what we saw on the guide was more deceleration than expecting and i think you have to have a longer term view on how long it takes them to penetrate their market internationally which is the key to the story right here. And they talked about growth being lumpy. How lumpy . And growth can be lumpy but what about the costs . They are spending more. 5 billion this ear on content, ramping to 6 billion next year. The key is to grow subscribers. Which comes as the pure contribution margin. The growing subscribers more slowly than anyone thought. Because the bulge they had in the First Quarter was just a launch phenomena. The growth is stepping down next quarter to about two million subs versus 4. 5 internationally. And something that makes me not want to chase the stock at this valuation. So what would you chase it at . What is a fair price for this stock at this point . Were arguing that this is a 104 stock. And if you get a decent discount to that you can take a look at it. There are other things to be concerned about with netflix. One i think is amazon. They are monk others launching a cheaper streaming service than netflix. And i think netflix argues this expands the market. Our concern is there is going to be a lower income consumer whose not going to get the services. And if you see someone like amazon whos a very powerful brand globally i think that limits netflixs open to take pricing up longer term. So growth is good but not a blue sky opportunity as the bulls might have hoped. So i think you can buy the company but be careful where you pick up the stop. Content . I think they are going to be able to make money on the salesman thspend they put out. You can support the spend with this number of subscribers, but you have got to be aware of what you are talking about here. This is a company that is burning 1 billion of Free Cash Flow this year. Another billion next year. Training a hundred types ebitda. With that higher hurdle, you have to be careful, keep your eyes open and not chase it in any price all being english language at the moment. They are learning now they do an interview online. They talk about english language but then how they are learning. And a lot of lessons and then they are going to eventually get into Foreign Language. What happens once you do that . And the incremental cost of the Foreign Language . I dont think the Foreign Language content is expensive. In fact its probably cheaper than a lot of the american content. I think its true that american content is incredibly exploitable and netflix is leveraging that. It is one of the strengths of their model. But i think what were going to see overtime is that it is not just netflix. It is nechx. Amazon. Cbs all accuracy in the u. S. There are going to be more and more people coming at streaming and i think the impact on netflix is one of less price and growth. And at some point some constrain on ability to add subscribers. Thank you barton. One thing i thought was fascinating on this call yesterday. Was this idea they asked would they ever do live sports or live anything . They are saying they could if they had wanted to do it live. I wonder eventually they get there. Also they now do the Conference Call live over youtube. I sue that. Its weird. Think about that. Getting more and more like a network whos model is supposedly failing. Broken. Drove it home to me yesterday all the Different Streaming Services have different content and once again, going to be like a network. Youre going to need a hit show. The whole business. Back to content. Back to wishing you could invent Something Like a squawk box. Yes. That is what most Network Executives sit around thinking. How to replicate that 20 year sort of a juggernaut. 21. Juggernaut a good word for you in. Ibm were talking about, with that juggernaut. But sarcasm is the domain of losers. You know that. Thank you mr. Sunshine. Thanks to stronger Cloud Service sales but medium size, medium to small size blue. Still suffering its 16th straight quarter of revenue decline. Joseph joins i now to break down the numbers. Managing director of technology and Business Services at kanter fitzgerald. It took me a second and a half to say 16. But you need to think about that. 16 straight quarters of arrive decline. Is whats going behind the scenes interesting enough to buy a stock that has had 16 straight quarters of arrive . That is not a growth stock, joe, in any universe that i know of. Yeah i think they deserve some credit for consistency. But what i would say is what do you think that 16 straight quarters is consistency for going down in revenue. Its im obviously joaquin around. Oh, sarcasm. Thanks jim. To your earlier comment. The strategic is 30 of revenue and growing about 17 . But the math backs into about 60 of arrive actually declining 10 . And that is the area were most concerned. If you look at projections on the top line we dont have this company returning to growth for another two years. And given the size of their restructuring charge i think it is fair to say that there is enough noise still going on that it will be a while before they return to that level of growth. And growth is the life blood of a business. So they really need to get to that level not only to support the business but to support the multiple. And then you think of the areas that you just mentioned that they are trying to get bigger in and that are growing faster. Is there any reason to think that an old tech company like ibm will be the leader in those new businesses . Because of what . Their financial muscle . Can they out innovate businesses that want to get into those same businesses . Why do you think ibm is going to be doing that . Past performance is no gua