And coming up, chuck robins talking earnings. Thats moments away. Our top story in s. An egyptair flight. This appeared from radar over the mediterranean. They had 66 passengers and crew onboard. Weve been watching this story and she joins thus morning. Good morning. We just heard from the minister of Civil Aviation in egypt. He said he is launching a joint investigation with french authorities trying to find out what happened to egyptair flight 804. The big question Going Forward is what exactly happened once this plane left the radar. What we understand is that happened around 2 30 a. M. They were 20 minutes from landing. This was in the southern mediterranean. The Greek Defense minister saying that the plane was making sharp swerving moves before it was lost from the radar. Now what we heard a few moments ago from the egyptian authorities is the reports coming out of greece were as yet unconfirmed and they said theyre going to refuse to provide this plane anything but missing until debris is found. We heard from the french president earlier to day. He said it appeared that plane had crashed. So a lot of conflicting reports and an investigation that is on going. Now i want to mention we do seem to have a photograph of this air bus 8320. It has the same serial number as the egyptair flight that is missing. But with a lot of questions of what is surrounding next, in paris this is where the plane originated right here at charles degal. It flies every day from pair tois cairo. There is already a Crisis Center thats been set up by french authorities to take care of the family members of the 15 french nationals thought to be onboard that plane. Thank you very much for that. Well be coming back to you in paris. Really quickly, jim, we know the bar for the markets to price things like this in is high. Yeah. I mean i dont know when this news first flashed, things have been looking okay overnight. And then people just cannot grasp it. You left thinking that cisco and sales force is what youre talking b they were sharply better than expected. Then you realize at 11. 067895, were talking about this. We do watch the continued move from companies and earnings. Walmart is sharply up in the premarket. The dow kpoen went better than expected First Quarter results. The Namesake Stores in the u. S. Posting positive comps for the seventh consecutive quarter. Theyre topping expectations. This is going to gap up by the most sense, 91. Hasnt gapped up 8 percent since 1991. Thats important. The last time it gapped down, it was in large part because people felt the company had lost a handle on the business. The stock fought all the way back. What i would tell you is i have a novel theory. I want to hear from doug on. This but he raised the amount he pays people. If you ask jim senegal, the man who really built costco, he would always tell you the reason you can crush walmart is turnover. A workforce that just turns over constantly. He got more per square foot out of his workforce than ive seen in a long time. I think this is historic. More importantly, the huge numbers here. Gross margins. This is about i think a workforce that is getting more per customer. That is something that i have not thought about with walmart since the age of walmart, david. Yeah. And lots of grocery, too. They seem to be very good at it. What, 50 or more of their sales come from grocery. But youre point is interesting. I didnt really give it much thought either, jim, the idea simply being theyre paying people more money and less turn going on and i guess better Customer Satisfaction and Customer Service that is resulting in high are sales. I guess that is the argument. Jim said listen, our you know, a place like walmart at times could have 30 turnover. And you have to spend so much money training people, training is dead weight loss. If you can cut down on training, cut down absenteeism, cut down on people nofg a dollar tree or to target, youre going to win. And i think that that may be the start of it. I think bill may have gone short term pain and long term gain. Im starting to like what im seeing. They didnt show weakness in apparel which is surprising. How about that . You know, the only other person dhanlt show weakness in apparel to some degree was urban. Everybody else was he advice rated in apparel. Well talk some of the retailers later. But people people are going to stop going to victorias secret. Apparel, including shoes and accessories, 8 of walmart. 19 at target. So are people migrating from target to walmart . You know what . Im going to make the judgement, yes. I know that Brian Cornell probably says why he is making that judgment . I have to tell you, the apparel inventories in target are way too high. They dominate in swim. There is a sense of renewed momentum in walmart. It comes out some of. Where its not coming out of amazon. Its coming out some of where. We know its not. I know. Yesterday, fascinating thing, making the rounds around the internet. Just in temperatures of the samestore sales declines and the stock declines of all the major retailers. And then at the bottom, amazon. Up 28 . I dont even remember the percentage gain in the stock price. But it is stark. Yeah, 700. Definitely goes higher. I think we have a chance to talk to Chuck Robinson at cisco. Reporting very strong outlook. This stock is rising in premarket. It is really taking off here. Joining us first on cnbc from san jose, chuck robins. Great to see you. Jim, thanks for having me on. Your voice sounds much better today, by the way. We struggled last night, didnt we . Okay. Chuck, i got a new narrative i want to bounce off you. The analysts are seemingly wetted to the old switching story, router storey. I see a company that has taken the top ten web sites Scale Companies and given them collaboration, given them security, given them an internet of things the way they can analyze the data. This is not the old cisco. It seems to have happened very rapidly. Well, jim, first off, you know, were very please wtd quarter and very happy with how the team executed. We had some real strength in businesses like collaboration and security and our Service Provider video. We have strength in china, india, u. S. , new orders was up 6 . So we were very pleased with the performance. You know, the reference that you make, i think we did a better job probably of articulating how ow business is transitioning. The point relative to the top ten web scale customers, that business did grow 31 . I think one of the data points that we provided was over 50 of that business was our data center switching portfolio which to date has been assumed to be white box. So i think that was a bit of a surprise to people. But we made a lot of progress there. Lets talk about the tone. I think there are a lot of people who were surprised how upbeat you were. Right at the end you said the last time we reported, this stock market had been gyrating. There was a lot of negative news. Our customers, enterprise, they pretty much were frozen. Things seem better than back then, dont they . Well, youre right, jim. If you look back at when we announced, we ended our quarter at the end of january. You guys better than anyone else know what was going on in the markets through january when we were in davos and we came out of that with customers that had really put their foot on the brakes. And over the last 90 days, its still a very uncertain macro environment. There is still a fair amount of caution out. There we see customers spending in areas they view to be strategic. So overall, i think the teams did great. Theyre spending on security up 17 . Our collaboration portfolio up 10 . And that business eclipsed to, you know, e 4 billion run rates. I think customers are spending in areas they deem to be stra teeth toik their future. There is a funny moment where someone says the slowdown in china n reality, your Chinese Business year over year is pretty amazing. How did that come back . Well, as china goes, we had a tough 2 1 2 years where i was constantly answering questions about when china is coming back. The joke on the call was that i think we grew 40 two quarters ago and maybe 60 last quarter and only grew 22 this quarter. We had decelerating growth which i thought was ironic. But overall, you know, we have staid very firm in china. We have been there for 20 years. We have had great bye directional communication with what we need to do there in order to be successful. Form a joint venture that we recently signed. We joined a company that will begin to kick in the second half of the year. Our team has done an amazing job. They hung in there. Im citing things did you right. 63. 5 billion in cash which is amazing. Continues to grow. You have a subscription business that people dont understand. But i thought most important is you had said other people were nipping at you. You mentioned the white box. You basically have become a company that is that has a giant install base. Thats where the big money is being made in gross margins. What we try to do is articulate is there are three great examples in our business. We have a cloud base networking portfolio that is over a billion dollars and grew in double digits. Our Security Portfolio which we take theed in the three quarters back that we thought the second half we would get back into the mid teens. It grew p 17 . But at the same time, our deferred revenue balance due to subscriptions and software grew 31 . And our collaboration portfolio which is over 4 billion grew 10 while our deferred revenue in that space due to subscription in software grew 16 . So my point was we have these businesses. We have proven we know how to transition them to a software and subscription business. And were going to take that methodology and now we have begun the process of rolling it across the broader portfolio. Its going to be a multiyear journey. But we have begun that effort. I think one of the things that people realize, youve been able to take advantage of the unicorns, the company thats have not been able to access the public markets. Were in a good position of a strategic buyer and the challenge ntz public market. This jasper deal which you made in february, it seems to have already paid off the 1. 4 billion pricetag. Jim, as we look at the Market Opportunity ahead of us, severing about this iot connectivity. Everything is going to be connected. And the jasper platform is the number one platform for connecting automobiles, vending machines and were adding one million devices per month to the platforms. We have 29 Service Providers around the world that have standardized on it. We have over seven million connective vehicles on that platform. And so we believe that, number one, jasper is an incredibly Strategic Asset for us. But tlos your point with the ipo markets effectively slowed down, maybe even shut down, its a Good Opportunity for us as a strategic buyer to look at opportunities here in the valley. Jasper is a phenomenal example of that and were seeing great acceleration in that platform as well as the security acquisition thats we made. Mr. Robins, just real quickly as we wrap up. I would love you to respond. Positive reviews, of course, of the earnings report. But theyre saying we think the primary take away from the release was to continuing cautious tone in both the enterprise and Service Provider segments. Is that a fair paoint on their part. David, please dont call me mr. Robbins first of all. Im not that old. Neither am i. But were getting there. Im sorry. I know. All right. Well, i think the there is definitely still caution in the system. And theres a lot of uncertainty in the geopolitical dynamic. You guys talk about the things going on with the brexit vote coming up, dynamics going on around the country. There is a lot of uncertainty in the economy. So i think our customers are still trying to navigate and balance all the issues. And our job is to execute to the best ability we have during those situations. I think we did that. Well, chushck, want to thank you so much for coming on. That is Chuck Robbins, the ceo of cisco. Good to see you, sir. Hey, thanks for having me, guys. Have a good day. Thank you. Got breaking news this morning involving Phil Mickelson. The sec has named mickelson as a relief defendant in a civil lawsuit against former dean foods chairman thomas davis and gambler billy walters. The sec mickelson generated 931,000 in profit by trading in dean foods base ond a stock tip from walters. Mickelson was not named in the criminal charges announce this is morning against walters and davis involving alleged insider trader regarding dean foods and garden restaurants. Well get more on that story in a few minutes. I believe the ag has a press conference coming up to day at noon. He should have just owned dean foods, not traded it. They spun out tree house and white wave. That is a lesson. Stick to golf and just own the stock. That dean foods was a good idea. You shouldnt have gone in and out. Whether we come back, well get more on todays movers including monsanto, making a bid to buy that company. Take a look at. That take another look at futures as well. This is the one Year Anniversary of the dows last record high on a closing and an intraday basis. May 19, 2015. Back in a minute. The call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Welcome back. Last night monsanto received an offer to buy the company, a couple weeks after we first heard reports that buyer was interested in pursuing a deal to acquire monsanto, the private letter sent by buyer, there was some discussion around the terms that they were willing to at least offer the company. But interestingly, this only became public and was confirmed by monsanto because of the comment of its coo yesterday after having presented an investor meeting in new york city. On the sidelines of the meeting after he had already spoken, the companys coo said to a reuters reporter in terms of the buyer potential bid, its all wild speculation. There is nothing there. You know what . If youre a securities learner and advising monsanto, you hear that and you go oh, no. We have toekt krt record. This is why we heard from monsanto yesterday and confirming that they had been approached from bayer. Otherwise, it would have given the companys more time to have worked in private to try to work out a deal. The question, of course, still is will they be able to work out some sort of a transaction . At this point, i have not been able to come up with the term that were offered if bayer nor apparently has any of the other Media Outlets following this story which, of course, involve one of the largest cross boarder takeovers weve ever seen and would be a huge deal for bayer bringing together the business with that, the huge seed business, agriculture business of monsanto creating a huge thing. There is not a lot of antitrust question here. You may certainly get some questions as to, frankly, National Security on the front and or opposition to gmo nz europe. None of that would seem to perhaps mitigate the deal from happening. But, jill, you know, we have to see what the price is. The expectations on monsantos part would be somewhere in the 140 range. Wow. Bayer itself would not be able to pay all cash. They would have to include a decent amount of stock. They couldnt lever up the balance seat that much them would have to potentially sell units in order to raise cash so you wouldnt have to leaver up as much. Either way, the expectation would be a combination of cash and stock in this deal. Dont forget monsanto pursued sergenta for quite some time and made the case there for antitrust. That was seen as the silver medal. They think this is the gold medal this deal even though it means monsanto giving up control. You say no antitrust. Im looking, brands for bayer. Herbicid herbicides, insecticided that, is the wheel house. Key crops here, cotton, corn, oil seeds, rice, soy, wheat. David, if im antitrust, i dont want dupont. I dont want this to happen. But there is no real overlap here within different crops. Especially here in the u. S. Youre talking about same pharma, different crops . Same farmers. And in this environment, jim, if they were to raise antitrust as hypocritical as that might seem given they kept saying there is no antitrust in, this environment given all the deals that are stopped, im sure people will pay attention. Remember who mon santo is in this administration. Theyre a company that is regarded as being antinatural organic as much as i say dont worry about gmo. Thats what they say. And also, very tough one, the farmers. David, you dont want to be against the farmers in an election year. Well have a lot more, i know bayer sounds like bayer. I should go with bayer. Thats how we say it here. They say bayer over there. It sounds like a buyer. Im a buyer. Buyer is a buyer. View it as a seller. Is he going to sell it to microsoft . Im not selling the stock. I want to kill two birds with one stone. And it would be the biggest u. S. Deal of the year. Lets keep that in mind. Monsanto, yes, well above 40. David, never going to happen. No. I cant no way can you say that. Right here. Never going to happen. Aint going to happen. Then went all we have to go. We dont want to miss the bell. Well get cramers mad dash and opening bell in a couple minutes. A good car has to maneuver quickly. Thats also true of a good car company. People have always bought cars. But we saw an opportunity in sharing cars. So we moved fast and launched car2go in 29 cities, all around the world. Doing that required dozens of data centers, designed for speed and performance. We built our business on the ibm cloud. Because thats what the ibm cloud is built for. Egyptair flight 804 crashed and there are findings that have been found by the Egyptian Air Force aircraft taking part in the search. Well get details in a moment. Meanwhile, the opening sbel four minutes away. At the Marine Mammal center, the environment is everything. We want to do our very best for each and every animal, and we want to operate a sustainable facili