You're watching...
CAZ Investments CIO Christopher Zook and Trading Advantage Senior Market Strategist Scott Bauer break down the earnings results for Microsoft.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
-- here though as we bring in Christopher is up he is chairman and chief investment officer of cat has.
Investments are -- you Chris so your take on the tone of earnings that's far and how it will impact the markets going forward.
Earnings have been very good what we've seen is consistently.
At a situation where the markets aren't getting the numbers that they're looking for.
But they also had already factored -- -- so Microsoft is a great example the stock's been performing very well.
These numbers were basically baked into the stock price appreciation we've seen over the last couple of weeks.
What we're gonna have to see in order for the market to continue to benefit from earnings is better revenue growth.
Operating expenses being lower that's wonderful and great management by their and their management team.
But we've got to see revenue growth in order to get sustainable earnings going forward and that's what hope was gonna happen in Microsoft's case with the launches of anything -- At stake Chris we got a lot more to talk about Microsoft but we got chipotle earnings Robert -- what do the numbers show what's.
See -- the numbers.
Again coming in better than expected here David is looking at a dollar 97 that's about four pennies ahead of the average estimate from -- revenue 640 point six million also.
Better than expected there there right same store sales up -- about 13% though they did note.
Most of the growth in revenue a lot of coming from new stores not the ones that have been open for a year or more they do see only mid single.
Food inflation here.
Did they do say that and there are still only looking for mid single digit comparable restaurant sales -- again this -- restaurants that have been open for a while not expecting a lot of growth there but they are looking to open as many as 165.
New restaurant openings.
Should also -- -- gross margin at least on the restaurants level.
Is two percentage points higher than the estimate overall also looks like they're more profitable from their sales in its -- and -- in after hours and.
It got it had a nice little -- -- nice little move there after hours and Chris well one thing about that your -- a lot of people worried about your exposure in Europe they've got hammered.
Looking to to grow their operations you're quite a bit despite the slowdown but not hurting the -- the bottom line today that's good news.
That is good news they're doing a wonderful job of executing.
And the -- with that particular company is valuation so it's nice to see the performance it's already been expected because of the stock price appreciation.
They have no margin of error right now they have to perform if they slip up -- all the stock prices got a really take a tumble.
But they're doing a wonderful job -- we need to see better same store sales growth.
Obviously they can gross -- stores -- You know -- foreseeable future but they need to be able to see the existing stores available to grow as well that's critical for that kind of a business sticking with chipotle Scott.
I'll send it back over -- you know -- -- been the higher out food and energy prices higher commodity crisis.
Prices excuse me impacting those margins in all the analysts were expecting margins to be squeeze that didn't happen they reported two points better in terms of the margin.
How they do that we know they had to raise prices customers kept coming people been critical leading up to the report today.
That the stock is a high flyer what's your take on commodities.
You know is it that concerns me going forward and and like Chris says that has the same store.
You know of comparison which is down a little bit bet that bothers him -- this stock like right you know I was and three months ago with you guys last earnings we're looking at -- 375 number.
This stock has been on an absolute terror but they don't say -- the company doesn't say much at all I think it's time here given what they just said about that.
That that to me is.
Critical I wouldn't doubt if we see a nice you know little 10% or so pull back.
In the stock I think it's just gonna be so difficult for them to keep these margins and like you -- you know the way that they they keep their expenses and life has been great.
But but just note that this company doesn't say a -- Have about anything outside of their earnings releases.
And this -- been on such a great momentum right you know over the last six months nine months we've seen this stock didn't just.
Being you know it's stellar stellar results all the time we have for forty just now I saw in in after market background here which was the -- Right which was the recent high and we pulled great offer that look for that as a big time resistant interest -- Decades and that's as you sales management doesn't exactly as you're talking the after hours numbers are doing exactly what you say there are pulling back.
They tested -- high waters and then pull back despite the good numbers let me go back to your body and Microsoft permitted here's your body because.
One thing about being their search engine which they've put so much hope -- -- they're spending a lot of money -- -- -- -- -- -- two billion to two and a half billion a year in operating losses running bing and are they gonna keep go on with this until it succeeds.
I you know I'd say they it's a questionable sort of investment at best 15% market share know that they -- and they're slowly inclined slowly clawing their way into some sort of substantial market share a couple things I'm pulling out nuggets from the company's statement.
You know one of the reasons we pay attention a Microsoft very much like Intel gives us a sense for not as a PC market -- what's happening with corporate IT spending.
And the company's C asked -- saying in his statement chief operating officer actually Kevin turner saying.
We're seeing robust demand for our enterprise products and services so over all of positive theme.
That we're seeing can be applied overall to technology.
Lori had asked me about the Xbox division a little bit earlier on today actually it was a weak point in the company's results.
And the division posted a deep crease of revenues -- 16% from the prior period due to -- -- in gaming console market.
Even -- the Xbox remained a top selling console in the US for fifteen months straight.
Two things that you're gonna listen now or in the investor call 'cause I'm not seeing it in that this statement IBC -- how windows eight satin.
Opera or when we're gonna see a -- 8 November October September.
And then obviously ayello patents remembered just in the last makers -- they spend a billion dollars on these AOL patents.
More details as to what the pipeline will show up.
As later on this year OK -- thanks -- what my I think that we'll be watching at the whole our show body thank you very much wants to -- but also.
To where Chris is well Chris -- and Scott are going to be going back with the CMA.
