Passes the 50 mark. Earnings, earnings, earnings. Cisco shares down sitely despite beating despite beating the street. Company plans to lay off 7 of the work force. Well talk to Chuck Robbins. Walmart shares up after beating the streets estimates and boosting its outlook. Whats ahead for the company now that jet. Com is going to be in the mix. And a strange story coming out of brazil as two olympic swimmers are pulled off a plane while drive trying to leave that country. Live to rio for the latest on the lochte controversy. First up, walmart poised to open at a 52week high after reporting Second Quarter operating profit of 1. 7, nickel above, revenue above consensus. U. S. Comps positive for a eighth straight quarter up 1. 6 and raising their full year guidance. Traffic was up and i believe its best in eight quarters traffic, comps up 1. 6. Best in eight. Some of these initiatives are starting to bear some fruit. I was going to add the ecommerce sales to that because that was a bright stop, 11. 8 , which was an improvement but still, not where it needs to be as Doug Mcmillon said. And as amazon continues to show 20 plus growth, already coming off such a bigger base online. Walmart. Com is going to be the focus for investors especially after 39. 3 billion acquisition of jet. Com. What is said on the Conference Call about integrating that. Certainly we know that mcmillon was after the talent there. Hes going to be running, mark laurie, running walmart. Com. See if they can really jump start it. Groceries were good and really after what target delivered the other day, you werent sure what you were going to get out of this bag today. And it makes you focus, perhaps, more heavily on what targets not doing as much as what walmart is. I believe it was cramer himself who tweeted this morning, walmart proves that targets problems are targets problems. They did talk about growth in Online Grocery as people increasingly getting their groceries delivered. Entertainment soft, in line with q1. Food deflation is going to remain a big issue for everyone in the space. They believe food deflation hurt the food comps 100 basis points as you pointed out earlier in the week. Groceries that you buy at a Grocery Store are getting cheaper all the time. And food that you pay for at restaurants are getting more expensive. Which is why people are opting to cook at home. This is going to be an issue, it was an issue last quarter. Target mentioned it. Kroger, all of the Grocery Stores are feeling it. Its going to make it tough for them, the deflationary food environment, at the point that mike santoli made yesterday, it is in the fed words transient or temporary in terms of the head wipdss. Walmart is continuing to invest in trying to get fresh foods and go where the consumer is going. They made note of the improvements that they have continued to make on terms of employee morale, boosting workers pay, a headwind on profits, but also has made the store experience better. And makes you wonder, the retailers that have been unable to compete with amazon, sure, trends have changed and Different Things are going on, but if you execute correctly, be or at least execute better, maybe this proves walmart does that you can compete effectively at least on some level with the amazons of the world. How much of that is in the stock already . I mean its been up 20 so far this year. Investors took note of the improvement. The question is when can they get out of half a percent sales growth, 1 comps, better, better than where it was, and the expectations were, but still a big shift to turn around. People are looking at sales up 3, operating down net 6. One of the things you will want to investigate. Courtney reagan spoke with the cfo and joins us this morning from headquarters with detail ps. Good morning, carl. Walmart shares getting a boost as you mentioned better than expected earnings. Well see what happens when shares actually begin trading and i spoke to walmart cfo brett bigs who attributes the store performance to retail fundamentals like clean stores, in stock inventory and improved employee morale. He actually doesnt see a market change in the consumer, but thinks there are things working in their favor like wages and gas prices and some aspects that are causing perhaps a little more caution than what the numbers show. And regarding the larger business decision, biggs says walmart is being thoughtful about its Capital Allocation leaning into investments like jet. Com, 3. 3 billion, less into others like selling 119 stores in mexico, its clothing chain called suburbia, decided to exit that. Walmart posted the best comps since the Third Quarter of 2013, eight straight quarters of positive comps 7 straight quarters of positive traffic. The opposite of target which saw the lowest traffic in 1. 5 years. The first negative comps in two years. I think grocery had a big part of that. Walmarts online Sales Growth Rate accelerated from last quarter, still below where it once was. The jet. Com acquisition, which will impact Fourth Quarter earnings by 5 cents we learned today in part from onetime costs, and on the prerecorded Conference Call, walmart ceo Doug Mcmillon talked a little bit about jet. Com saying one of the things we like about the technology theyve developed it rewards customers in real time with savings on a basket of goods and puts them more in charge of the price they pay. And then just moments ago, i wrapped up a media call and walmarts u. S. Ceo greg foreign said the retailer is feeling good about going into the holidays, saying theyre in better shape, cleaner, better prepared. And also unlike targets comments on electronics, foreign said walmart doesnt call out numbers from electronics and said, quote, we feel the performance across categories was steady. Food or general merchandise. Target said basically the exact opposite. That lower traffic hit across all categories. Back to you guys. Yeah. We made a big deal of that lower traffic at target. Of course as you say, walmarts traffic up 1. 2 ticket. Didnt cross into the negative. What explains the disparity between walmart and target over the past couple days . So, you know, its funny because target sort of said look, if things were kind of crummy across the board. Walmart said the opposite, things were steady, consistent across the board. If i were to look at it, i think grocery makes all the difference. 56 of walmart sales come from grocery. Its about 20 from target. And so youre going into the stores to buy your bananas or your milk and potentially likely to pick up general merchandise and if youre not doing that as much at target it has a more negative effect perhaps on your general merchandise. Remember target is in the middle of switching its pharmacy so as they switch over to cvs, all of those k customers have to reenroll and resign up for the pharmacy benefits and thats a little bit of a pain for some shoppers and perhaps it kept them from going to target, at least right now. Target said they anticipated that problem but hopefully they can figure it out. Were singling out target because of that negative comp story yesterday. Sure. Really a difference in the results. I wonder if walmart is taking share from target and other retailers that are struggling. For instance, i dont know if they overlap. Do they take apparel customers from macys or jc penney or the other stores that are seeing declining sales. I wouldnt say so much apparel. Again i think its grocery and its that general merchandise. So we talked a lot about the competition between walmart and Dollar Stores for those fill in trips. I think target had hoped to take the place of the dollar store for a fillin trip. Im not sure its happened yet. I dont know if this means that walmart has grabbed some of those fillin shoppers. The Dollar Stores may or may not have lost. So i think its very fair, sara, to think there probably is share gain. Maybe its from target, but maybe its from the Dollar Stores. All right. Indeed. We will watch that closely. You know, anybody who goes to target and has their wife go into the dollar bins knows thats where the incremental sales come from. Go in for one thing and watch out with a bunch of stuff. T mobile saying goodbye to data plans and announcing a new unlimited plan. Were going to talk to Ceo John Legere in the next hour. Cisco cutting jobs, better than expected quarterly results. Chuck robps will joins us live to talk about the Growth Strategy on cnbc in a minute. Youre here to buy enis really built into theat foundation of the company. Whole foods market is engaged with pg e on many levels, to really reduce energy and reduce our environmental footprint. For a customer like whole foods, saving energy means helping our environment, and we can be a part of that. Helping Customers Save Energy is a very important part of what pg e does. We can pass those savings on to the environment, the business, and the community. Pg e really is an expert in saving energy, and that partnership is extremely exciting. Together, were building a better california. Ciscos off about a percent in the premarket after cisco beats by three cents. The Work Force Reductions well talk about that with chuck robbence in a few minutes. Robbins in a few minutes. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. 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Custom alerts on thinkorswim. Only at td ameritrade. Bibaud,. Cisco out with results, cutting 5500 employees, 7 of the work force as it seeks to refocus on its software and Services Businesses. Joining us is the ceo of Cisco Chuck Robbins who joins us from san jose. Good morning to you. Hey, carl, great to be here. Hope youre doing well. Yes. Its nice to have you. Im sure jim and david wish they were here. Talk about the quarter. Margin performance was, obviously, strong. You got deferred revenue growth. You got a lack of big warnings on macro. Some investors wonder why the guidance wasnt even better . Well, carl, you know we are proud of not only the quarter but the year we just completed. We had growth of 3 on the year in q4. We had 2 growth and we had 9 nongap e ps growth which was a record for us and finished the year at 2. 36. We had a were very proud of what our teams have done and frankly very volatility environment throughout the year. As we looked at q1, you know, what we really saw was a weakening of demand in q 4 in our Service Provider segment around the world and emerging markets. Those two countries were negative this past quarter, but the rest of our business, enterprise, commercial, Public Sector and developed countries was up 5 . So overall, good performance there. But really, it was combination of the weakening demand we saw in emerging and Service Provider as well as the, you know, were just not sure were going to see a shift in that in q1 and frankly, were starting to see a little bit of impact from the transition in the Business Model which is something were driving proactively, obviously. Yeah. You mentioned the weakness among Service Providers. You pointed out em, but you also pointed out uk and im wondering, investors might be quick to try to draw a line between that and policy decisions between that and brexit. Is that what you think you saw . As it relates to brexit, carl, what we saw is probably exactly what most companies saw and what you would expect. We did have an extra month in our quarter versus other companies who reported at the end of june and what we saw was, you know, companies who our customers who had paused based on the uncertainty and decision, we had impact from the currency devaluation in the uk, but if you look at broader europe the large contributor to our business in europe, the negative business in europe this past quarter, was really the Service Provider piece. But if you look at the bright spots that we had, in our security business continues to move forward Third Quarter of doubledigit growth up 16 with deferred revenue up 29. Collaboration continues to perform well up 6 with deferred revenue up in the mid teens. Youve got our data center switching portfolio that continues to perform well, our Services Business did well, and you mentioned that deferred recurring revenue which is indicative of the transition to the software and subscription business up 33 again in this quarter. Were pleased with those areas. Operating margin, forgive me if i have this wrong, highest since fiscal 06. I wonder, we keep hearing the narrative that Large Cap Companies are running out of ideas to maintain margin. Are you telling us theres more runway there . Well, carl, we look at our Financial Model and were committed to delivering on our commitments to our shareholders from a bottom line perspective and that requires us to manage a lot of levers including gross margins, expenses, our pricing, but i think its reflective of the value that our customers see in our role as they move through this next wave of Technology Transition and the value that the network is going to play as we connect more and more devices across a broader geography, the security thats required, the analytics that could come out of the network, the enablement of them to truly take advantage of this private and public cloud world with hybrid cloud those are the things that are important and customers see the value we can bring to them. On the layoffs, it sounds like youre going to take the savings and reinvest so two questions. How much thought did you give to sending that shareholders way and where do we think the 20 figure that was reported yesterday came from . Well, first of all, carl, any time we make these decisions we do not make them lightly and were dealing with peoples lives. Its a very serious issue for us. We also work in an environment where, you know, the markets are changing faster than anything ive ever seen. The Customer Expectations are changing, technology is transitioning faster than ever. Weve got the dynamic economy around the world, global geopolitical dynamics, a lot of factors that come in and what our responsibility is, is to ensure that were aligning our expenses against those areas that we believe will drive our growth in the future. I think that for the reports to get out ahead of our announcement, frankly, are a little irresponsible. Were talking about peoples lives here. And i think that was even an insinuation that we may have leaked that which was insulting. We would never do that before we had an opportunity to speak to our own employees. We communicated with them and take care of them and do the right thing for them but we have to invest for the future. Finally, chuck, coming on an election in this country, and winter, given what we talked about in other part of the world where there have been policy unserts if you think capex going into year end will suffer because we have no visibility on what policy may be . Carl, when we look at the Service Provider space, i think theres been well documented capex challenges through the first half of the year and we saw that exactly play out in our business as though reports had indicated. Much weaker outside the United States than in the United States. I think as we get towards a president ial election i think the uncertainty is what sort of keeps people from moving and regardless of where we land, once we have decisions people can tend to move because they understand what the Playing Field is theyre moving against. I think clearly after the elections, i think people will have more clarity about how to move forward. But i think that our country and the world today is actually better able to digest rapid changes and i think we will be okay. Chuck, we really appreciate you coming and talking to us as you always do after the quarter. Thanks so much. Hey, carl, thank you. Chuck robbins, of cisco, joining us talking about election uncertainties, capex, layoffs. I think thats the biggest story. What stands out to me most, i guess in this report, is that the fact that revenues from Telecom Carriers and other Service Providers were negative after three consecutive quarters of growth. Its that capex story that is getting a lot more play, ever since the day that gdp came out and you see that Business Investment in this country is suffering. Now you can blame it on election uncertainty, maybe some of it or a larger portion has to do with just Overall Economic uncert