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tv   Mad Money  CNBC  July 24, 2019 6:00pm-7:00pm EDT

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on the show. hope she is watching. >> i'm sure she is. >> feels like it is about to break out to me, financial prudential. >> that's do it for us thanks for watching. t e you back here tomorrow a 5:00 for more "fast money" in my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, my job is to make you money. my job is educate, teach and put it in context. call me or tweet me @jimcramer there is the people. there is the corporations and then there is the government right now the first two are doing extremely well but the
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third, boy, is it ever in the way even with record numbers after a day with the dow losing 79 and s&p advancing and nasdaq gaining, the last two both records. you need to understand that the government has become the one wild card in this market and does reek havoc on all sorts of stocks last fall the fed created it's only personal bear market because he told us he might need to raise interest rates over shooting to stamp out inflation, which at the time was non-exi non-existe non-existent totally out of touch and crushed the market powell's rookie mistake almost gave us a recession but came to his senses in january and changed course but we never should have been in that position to begin with that's what keeps happening. we never would have gotten in
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this mess with janet yellen. she was day to driven and understood the power of her words but even though president trump's tweets are about lower interest rates and maybe having some effect, i don't know. remember what he did he sat janet yellen. as much as he likes to bash powell, he hired the guy we're feeling the effects of the mistake and weakness in caterpillar, one of two stocks that did hurt the dow jones average and the president's trade policy trump likes to keep evening guessing next week's trade talks go well or badly great friend president xi buy soybeans from us and bury them somewhere in the desert because they have enough so i? the truth is we have no idea where this is going. maybe china will make concessions, maybe they won't. there is no clarity. i think the chinese government has been taking advantage of us for decades. it made sense to crack down on the bad behavior but kept the
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stock market down from lofty records, should be taken out what it was doing in september by a mile and like the higher rates from the fed and the -- well, let's just say they cost the american business person a lot of money they probably cost you money but consumers are so flushed you don't feel it and there are so many jobs available, but that's why this is the best time to go toe to toe with china and they deserve it even though it doesn't make sense long term, doesn't mean it makes sense for the market i think the stock market would be substantially higher. i got the sense this was an incredibly probusiness administration regulations, we don't need no stinking regulations or at least that was their attitude until today the agencies run by president trump, presidential appointees
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declared war and going after big tech and facebook and apple and amazon going after alphabet, alo along, long way to go overnight we learned they are launching the anti trust division near the beginning of his tenure, he agreed these tech companies were the best america had to offer. i'm proud they are american. he didn't want to stifle the invasion and a year later i interviewed him for a corporate government conference and i should have known then the gears were shifting. i presumed he didn't change his mind he talked about how any competitive behavior if it lowers prices for you, the consumer he's not wrong if you offer consumers great prices to drive outcome pet t cs standard oil that's shocking because they are laser focused and we know
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justice is going after big dogs and their ingenuity won't save them this time the fact amazon is doing the same thing online that walmart did offline doesn't matter it questions competitors when nobody cared about the stuff amazon web services lowers prices for everybody but yes, it can allow companies, for decades as long as they are pushing the prices down, regulators don't mind if they got blood thirsty it was good for you. if google is making life difficult for yelp, there is no immunity with apple building an incredible product by forces you to buy the apps from their store, does that really make them a monopoly? who says you have to buy the apps 40 years ago yes, this was textbook competitive behavior but unenforced so long i'm indignant on apple's behalf and the regulatory regime changes overnight from a republican
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president anti regulation and then there is facebook now, facebook is also being investigated by justice but today was about the suddenly very tough federal trade commission running rough shot over ceo mark zuckerberg for privacy violations the fdc has been a paper target and we learned they hit facebook with a $5 million fine some people say not that large some people said chump change for $584 billion but more importantly, they announced an unprecedented series of actions designed to strip zuckerberg of his power overall things privacy and some of these people wanted to strip zuckerberg of all power on everything. i got to tell you, this privacy matters tremendously, you know why? given the product facebook offers is you, more than privacies incredibly important to every decision they make. the fcc told facebook to install independent directors on the board and monitor zuckerberg's actions and everyone else's too.
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he can't make privacy decisions anymore. it will be handled on the board. is astonished. it wasn't talked about enough. this is amazing. the president pointed to the chairman joseph simon himself and a partner of paul weiss. you know what that means he's indepersonal dent and honest and can't be bought this is brutal decision. in a way facebook had it coming but simon nailed him harder than if you take him to court i think it will hurt their ability to make money and be creative but reported such a good number tonight, maybe nobody will care for now again, i know the $5 billion fine isn't anything but the strip tou scriptures are the real deal it was a rude awakening for you. i said over and over again facebook needed to hire a big shot federal judge, well-respected lawyer to self-police. i warned them and warned them and warned them without a real
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effort to self-regulate, the government would step in and do it for them and they are paying the price for not listening and an incredible level of intrusion, not loss of aton me not to mention the other big tech names i heard facebook got off easy. that's bad news for the future if you're a shareholder even after tonight's good quarter what does this mean for you? >> going forward we need to measure how much government interference there can be for your portfolio, not a warrened a machine station or sanders administration but trump administration the bottom line, after today this white house is not as friendly to big business as i thought. the days of corporations getting a free pass is over unless they happen to be in republican friendly industries like coal and oil and that's a major shift not getting enough attention the fine was the only one that talked it out. after today i think this intrusion by the government is being ignored as your own paril.
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let's go to dennis. >> caller: how are you >> good. how about you? >> caller: good. i'm seeing several different factors on carnival cruise line. i'm seeing a 52-week low of $44.76 a share on june 27th, but then i'm seeing a significant inside a purchase by two insiders recently. >> okay. >> caller: i'm also seeing lower full year earning guidance and i'm seeing lower net revenue guidance. >> here is what is happening the cruise business was better and got softer and cuba was taken away and what happened is that you basically got blind sided, the president blind sided
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with getting rid of cuba and i do think that royal is a better buy right now. can i go to jeff in florida, please, jeff >> caller: hey, mr. cramer how are you, sir >> doing well, jeff, how about you? >> caller: very well i would like to shoutout a huge boo-yah to you and just let you know that i appreciate what you do for people. i don't think they really appreciate the fact of the knowledge that you put out there for people. >> you're very kind. i see people on the street and i get a lot of nice comments so i'm always pretty happy. we had nice people that came by last night so incredibly gracious, i get a lot of nice things but thank you so much. very kind. >> caller: yes, yes, yes, and you're very welcome, sir. >> thank you. >> caller: it -- what you do is very much appreciated. >> thank you. >> caller: by those of us that look out for ourselves.
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>> okay, thank you >> caller: with that being said, sir, i got a two-prong question. number one, it's kraft heinz and the new ceo miguel he's come from some pretty big companies and i'm just wondering what your thoughts are on that. >> okay. here is the problem with kfc in the end, there is no growth i don't like growth. i don't think they can shuffle all they want on that food company but to me what matters is growth because this is about the stock market, not about pantry brands. i'll tell you to stay away and stick with the gross stock like a pepsico or coca-cola the wild card in this market, let's own it it's the government. this administration isn't as friendly to business as i thought. they carved out businesses but these big great american businesses, uh-uh, he's saying no more free passes.
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on "mad money" tonight, metamorphosis, the caterpillar turning into a butterfly or not and how to profit off the biggest news in washington this week not the mueller hearing and the debt ceiling deal and the major banks aren't the only financials winning here to find out if they continue to climb even after these terrific earnings so stay with cramer >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter have a question? tweet cramer #madtweets. send jim an email to or give us a call at 1-800-743-cnbc. miss something head to ♪ limu emu & doug
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if you're running a cyclic company your goal is to become less hostage to the economy. you can smooth out earnings and disinta disentangle sales and you have a winner as long as the numbers
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remain, you will have a boom and bust cycle when there is a bust, cyclics get destroyed. we have examples when you get it wrong and wrong. ups, one time or another they have been hurt by economics and overseas today showed you what happens when united parcel manages to smooth things out. a much better story and the stock exploded higher up nearly 8% ups is no longer a cyclical and when i spoke to the ceo, i couldn't agree boom, they did it. it's got a sec cue lar growth story that's related to e commerce and makes for a much better stock wall street always pays for more secular grower than a cyclical one. texas instruments is in a similar one. despite the stock's 7% rally, you should know the quarter
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texas instruments reported was ugly their sales declined across the businesses, from personal devices to autos and industrial cell phones but get this, the company's actual bottom line was better than expected because even though the economic backdrop was extraordinarily weak, texas instruments smoothed things out and delivered fantastic earnings per share they have become a sec cue lkek grower companies that live by the business cycle, they die by the business cycle if you don't try to change, sooner or later you get slammed so take caterpillar. this morning when cat reported, i expected them to have an oak quarter, not great but better than the broader economy trying to turn to a secular grower. i was wrong. management did keep the full year guidance. some of the short fall was a
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recently announced restructuring and pay off. cat bought back a ton of stock, too, which is what i like to see. at the same time, at a higher raw cost $500 million in inventory, that's way too much too much supply. at the end of the day, caterpillar turned out to be too much in the oil and gas cycle. we know from hall l halliburton drilling is deeply cyclical, i hope the ceo will under promise and over deliver, in someways i think he did the opposite. still, i think it's a buy if it pulls back below 130 i told members of the action alert plus that because i think jim can turn things around but now i only feel comfortable saying that because it looks like the fed will cut interest rates. believe me, this process of transformation is not easy and i feel bad because i know how hard
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it is. honey well did it but took one, nottwo ceos to transition from a sec cue lular grower and spli into three separate companies, aerospace. that's one reason why they are trying to buy rathion. the rails are trying to have growth it worked for union pacific but didn't work for csx and i don't feel great about norfolk southern that got slammed. i would love for them to come on the show watch this process when the cyclicals can pull it off, it's like a transformation from an ugly cater pi er pilcaa caterpillar to a beautiful butterfly. stick with cramer.
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well, so many were focused on the mueller hearing today, the biggest news out of washington this week aside from the justice department's decision to crack down on america's biggest and best tech companies was the debt ceiling deal nobody talked about it congress agreed to lift the limit through 2021 and got rid of the budget cap. what does that mean? it means the companies that feed at the federal trough are safe for the next two years and nobody is more relying on government spending than defense contractors. which should you buy i got a brand-new play in the defense space and it's the best. it's called l 3 harris technologies created by harris corporation which you know we like and l 3 technologies, an old friend of the show which was completed at the beginning of this month, this was a brilliant combination. created the most high tech operator in the industry and makes l 3 harris incredibly
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compelling let me break it down i've been a big fan of the old harris for years since the last big merger from 2015 we had the ceo on at that time and i was just salivating over this deal. harris made wireless whitman electronic systems and space-born antennas for the defense sector, radios, tactical communications embedded inkri s encryption they had a lot of over lap but brought night vision goggles, radar and reconsis to the table. at the time i told you william brown, bill brown ceo of harris deserves the benefit of the doubt because he had a terrific record of integrating large acquisitions back then a little over three years ago, the stock was trading at under $80 when we really told you this is the one to own in the group. by the time the l 3 merger was announced in october, it was the 150s and now that harris and l 3
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combined at $198 this spectacular 155% gain that was gettable i know people just want to hide in index funds and push this and push this. how about l 3 technologietechnos they make communications for commercial aviation customers and have cyber security exposure good contract. that over lap is why the merger are l 3 harris made so much sense. it gives more scale to allow them to cut cost and strike better bargains with governments around the world the new l 3 harris is the sixth largest defense contractor in america and invest more heavily in invasion and the same reason why united technologies is with a tech heavy rathyon and i think l 3 and i think harris are better run than rathion. this deal was incredibly compelling 500 million in annual pretext cost cynergies by the third
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year, the company is expecting to generate 3 billion in free cash flow up from 1.9 billion. that's incredible. harris is the er and giving 53% this is as close as it really can get for a stock for stock merger of equals that aren't like this which means it didn't hurt the balance sheet or anybody's feelings the best executives are staying on board bill brown remains the chairman and ceo. this is the guy that did a fabulous job now, get this, l 3's former ceo chris has now become the chairman, president and chief operating officer in l 3 harris but these two are going to switch jobs. when brown retires in two years, they will take the reigns highly unusual again, a sign that this is a true merger. it's a great story the close got a chance to speak with both on squawk on the street and made it clear l 3
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harris is the most consistent parts to the defense budget. listen to harris' bill brown. >> we're a technology company and in fact, we're a mission solutions provider we don't do ships or planes. we provide equipment on the ships and planes that make more or better new aircraft, new ships, as well as legacy aircraft and legacy ships. so we provide equipment that makes those platforms work better. >> wow see, in other words, they are less to any one project and a wide array of solutions. not just one plane or ship the whole slew they have a huge intelligence surveillance business that never goes out of stock when you're in a cold war with the chinese now that harris and l 3 joined force, what's the plan here? first and foremost, they are all about investing in research and development. i can't stress this enough l 3 harris is a high tech company that makes extraordinary complex products and valuable to
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the pentagon and defense contractor because of the technical expertise. management is in the process of integrating two companies, optimizing the supply chain and eliminating unnecessary overhead l 3 harris expect the cost sa r savings to come to 1.8%. they predicted savings would come in at 1.4 big deal third, they want to reward their shareholders, they made that point to me on and off camera. this is their big focus. right out of the gate the company announced a 10% dividend boost and added $4 billion to the buy back and expect to spend $2.5 billion of that over the next 12 months that's a reason the stock has been going up after that increase, the stock supports a 1.5% yield but management will consider raising the payout again in the first quarter of next year but the buy back meant $4 billion, that is substantial. this is only a $44 billion company. they will be there every day they will retire 9%, including
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more than 5% over the next year hoping i bump into you on the street you think about this. there is a lot to like it's no wonder l 3 harris had a nice run after washing out, told you to buy it again, the stock is climbing $20 from the close on july 1st. it is trading at 15 times 2021 numbers a slight prep ymium to rest of the group. general dynamics sells for 14 and a lower yield than the other players in space, however, i think l 3 harris deserves the premium because it's a technology oriented difficult proprietorry there is and the least in the individual project that might be cut just in case we have a budget someone decides we got to cut the defense budget and trading at a discount compared to the average stock in the s&p 500. if you buy this here, you're betting management will be able to over deliver when it comes to the cost of cynergies to the deal like the acquisition.
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by the way, that's exactly why goldman sachs initiated coverage on l 3 harris with a buy rating and a $240 price target just two weeks ago so they are out there locked and loaded. their thesis, they think the company can beat the earnings estimates in short order and believe that l 3 harris is poised to take market share in the pentagon budget thanks to the technology rich products offerings. they are in some of the strongest parts of the sector and had strong numbers the last time they reported and management has a tremendous track record the company reports next wednesday. it's before the open and in all honesty, i'm not quite sure what to expect because all of the moving parts but i like l 3 harris so much that i think you should prepare to buy it if the quarter is confusing, which it very much might be and the stock pulls back but get this, i would not be adverse to you buying stuff, stock tomorrow right here and then waiting for the quarter to buy more. that is the level of conviction
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i have with the new l 3 harris technologies lhx craig in tennessee, craig? >> caller: jim, a bigwar eagle boo-yah from nashville, tennessee. >> nashville, the area is booming and great real estate investment what is going on >> caller: irbt lowered guidance for the rest of the year because of the trade war stock plunged 20%. is it a buy? >> not yet i mean, we did work on this today with my action alert group. here is the deal when you have a decline like this, there is still sellers out there that didn't get done i think you got to wait until next week if you want to but i don't like it. i don't like it. i don't like big surprises not me cup of tea. terry in missouri, terry >> caller: jim, thanks for taking my call first time caller, long time
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listener hey, what do you think of u.s. steel? >> no. >> caller: is this a low point >> no. no i'm a balance sheet guy if u.s. steel goes up which it may i would rather you be in new core why? because you can sleep at night with a better balance sheet and i've seen huge amounts of money lost in steel stocks with bad balance sheets and we know what we're talking about whether it be from wheeling to jones and lock land to some of the moones like bethlehem steel i think l 3 harris is a great long term investment even if it gets hit on earnings, you can buy into weakness. maybe buy that for action alerts much more "mad money" ahead. the fed is set to cut short term interest rates, what does it mean for a regional bank
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company? are they supposed to get hurt? does the cloud king earning report say i'll sit down with service now, a favorite to break down the report and rapid fire on tonight's edition of "the lightning round" so stay with cramer tell him we're flexible. don't worry. my dutch is ok. just ok? (in dutch) tell him we need this merger. (in dutch) it's happening..! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing. your daily dashboard from fidelity. a visual snapshot of your investments.
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when the major banks reported, they knocked the ball out of the park. but they are not the only financials waiting here. many of the regional banks caught fire, too take one of my favorites, the tennessee based regional bank with more than 350 locations when first arrived, they reported the company delivered a 5 cents earnings beat, that's a giant beat for a bank. higher than expected sales up 6% year over year driven by higher fee income when you drill it down, they had 5% average loan growth that's strong. their efficiency ratio off the chart and percentage of sales they spent down big. coming in at 59% wall street looking for 62 there is a lot to like here. no wonder the stock jumped 6% on the news this is a bank stock wall street is nervous about the banks because the fed looks set to cut short term interest rates and cut into profitability but
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at this quarter, you have to wonder whether the stock might be worth owning. do not take it from me let's check in with brian jordan, the always reliable chairman and ceo of first horizon national he had a better sense. i got to tell you, this was a quarter that made me think, you know what? let's forget about net interest margin and talk about growth you've got maybe the best growth of any bank i follow in this country. >> well, thank you we have an outstanding footprint in the economy that's still very, very strong and if we're slowing down, it appears to be that it may be more regional on average. we're seeing very good growth in the carolinas and tennessee and florida. >> now, it also seems this is the kind of ideal time for a bank, your charge also low you've got something, you're specially lending is on fire it just seems like this is the environment that we've been waiting for which is why your stock has taken off. >> yeah, i agree
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credit quality continues to be very, very good and an interesting statistic annual financial statements come in and they get reviewed about mostly from the end of the first quarter through the end of the second quarter this year, we had fewer credit downgrades, which is a dead cree in credit. credit is strong and interest rates is stable as you suggested in your intro, we'll probably see the fed cut this month and maybe again later in the year but the economy as i said earlier is still pretty strong, borrowers are borrowing money and we're still optimistic about our ability to grow in this environment. >> brian, the thing negative people will say is wade a second, you two guys are talking and excited. what the hell does the fed need to cut rates for if things are good i could argue things could get better because there is no inflation from what i see. why not cut rates?
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i mean, what is the point of that last quarter point? do you agree >> yeah, i think that's the basic argument with inflation running plus or minus one and a half, 1.6% if the fed cuts by 25 basis points and inflation goes up a little bit and it strengthening the economy, is that a bad thing? i think it would be hard to argue against that i think that may be the fundamental under pinning of what drives the decision in the next several quarters. >> is it possible tennessee, north carolina, south carolina and florida are the strongest states in the country? >> well, i don't know if they are the strongest but they are going to be some of the strongest in my view they are great environment for business they are good for labor. they are good for cost of living, low tax states and so we're seeing a lot of opportunity and as we talk to borrowers across the entire franchise, while there is a
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little bit of concern about what we don't know that's been factored into the yield curve and what may be happening with tariffs, on the whole, people are very, very excited and optimistic and their balance streets are strong. >> do you think that we can possibly say that there is two economies, there is the consumer doing incredibly well and then some of the larger companies that have to deal with tariffs and overseas that aren't doing as well or concerned because it does seem like washington is making life trouble some for some companies that sell overseas. >> i think that's fair the consumer is still very, very strong and you see that in credit card usage, you see that in consumer confidence and employment reports, and you never can lose sight of the fact that 70% or so of the economy is driven by the consumer there are some things that are impacting commercial entities and those are real and they are
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likely to have some impact but if people can stay employed and continue to spend money, i think the e econo continue to spend money, i think the e econoeconomy will be stab 1.5 or 2% growth, i think we're in a period where with lower interest rates and strong consumer, we can see a pretty attractive economy for the next several quarters if not years. >> now how are you able to for a long time you have a plan that's amazing. but it just seems like this one quarter, the expenses really clicked. it showed me what could happen you have expenses doing nothing and revenues going up. that makes you a very valuable franchise. >> well, thank you we still use the bone fishme it still drives the financial management and we're focused on driving return on equity we use the phrase often we try to control what we can control and as we completed the merger integration with capital bank and we completed the $85 million
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in cost, we saw additional costs opportunities that we think we could realize. we took some of those and took them to the bottom line as you said by keeping costs flat and down and at the same time, we're continuing to make investments in the business. we're hiring bankers we're bringing people onto the platform we're investing in technology. so we're trying to focus on eliminating the bad cost and keep spending the dollars on the things that will help the business grow. >> i got to congratulate you and it was just the breakout quarter that i knew could happen you did a great job. that's brian jordan. he is the chairman ceo of first horizon. you want these $16 stocks to get excited about? get excited about this one stay with cramer don't miss your golden opportunity to experience the luxury you desire
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prpharmacist recommendedne memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. it is time, it is time for the lightning round. buy, buy, sell, sell, buy, buy, sell, sell and then the lightning round is over are you ready ski daddy? time for the lightening round. cy in tennessee, cy?
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>> caller: hey, jim, boo-yah. >> boo-yah. >> all right so i want to give you a recommendation on -- >> i think it's the backbone f so much going on in silicon valley whether it will l iryft r air b and b. it is stellar. buy it how about nick in maine, nick? >> caller: hey, jim, how is it going? >> not bad, you? >> caller: good. good i'm 25 years old and i think hbo max is under valued. should i chase at&t here >> i think at&t delivered a good quarter. they said it's too expensive but i believe the cash flow is huge and att can be bought. i need to go to drew in florida, drew >> caller: hey, jim, this is drew thanks for everything you do for us every night. >> thank you >> caller: my stock i'm asking about tonight is iron mountain solutions. >> got a good yield and that is
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good distribution and the distribution is real and worth earning the stock. let's go to mike in ohio, mike >> caller: boo-yah, baby. >> boo-yah >> caller: go bucks. >> what's up >> caller: interesting life, came back as a aap member. >> terrific. >> caller: what do you think of smlp >> too high. there is something the matter. that yield is too high i don't like it. this is another mlp trap stay away from it. ken in new jersey, ken >> caller: hey, jim, how are you doing? >> good, how about you >> pretty good i'm wondering if fortune band sz a hold i got in around -- >> no, with rates coming down i'll sanction buying the stock we had a show the other day at home depot of fortune brands is fine here and that ladies and gentlemen, is the conclusion of the lightning round.
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>> announcer: the lightning round is sponsored by t.d. ameritra ameritrade eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
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i'm always warning you about the fantastic stocks of great companies that run up into earnings when they get ahead of themselves, the stocks go down if the underlying company reports a good quarter and the cloud software company helps back office jobs stock is hard in the after hours
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trading as the company reported a quart we are a little hair on it a 63 cent basis higher than expected sells the problem with the company is the billings forecast for the next quarter was a bit light as was its operating margin guidance but because the stock had run into the quarter ending, it was going to cause sell off and i questioned these knit picks so is it worth buying into the pull back? let's take a closer look with john and he's the president and ceo of service now welcome back to "mad money." >> thank you, jim, nice to be here. >> all right john, a lot of times these analyst get caught up in nitty gritty and find they mainly do misdirection play. let's talk about the things first i think are very important. new customers and big customers, sign any and how big well, we now, jim, have 766 customers that are a million dollars and greater. we signed 40 new customers of $1
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million or greater in the quarter and that's simatic of the fact that we now work with 75% of the global 500. we're increasingly a strategy partner with the customers three or products with the deals and so we feel very good about the relationships we're building with the world's largest customers, the largest companies or governments. >> and i knew you would build quite a relationship with microsoft. they had the single best quarter of any large capization stock during this year tell me about the relationship and what it's doing for surface now. >> well, the relationship jim is a very good one and we're initially focussing on u.s. federal business where microsoft has a strong presence as do we we have a huge federal business and our data centers have a certain security clearance microsoft ashuer will replicate us we'll partner with them to make
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advantage of that capability and joint recall on u.s. federal customers as well doing the same with federal customers in australia and increasingly we'll look at other government markets. so we have 20 different product integrations with microsoft, a long hissy with them so we think there is a lot of shared opportunity. >> there was some complication with the call. you had a departing cfo everybody loves. a lot of congratulations to him. people seem to pick on different met tricks and i have learns from someone whose met trick you did better on than he did, mark from sales force i need to get up to speed about remaining performance obligation because that is the apples to apples tale, in the necessarily bookings but rpos. how do you stack up versus what you were looking for and others, other cloud kaings as we call them in your industry? >> rpo is a very good indication
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that probably the best forward looking indication of our business because it demonstrates what kind of revenue you can expect going forward our rpo, current rpo grew 35% in the quarter. so we feel very good about the outlook and future of our business, and we raised guidance for the full year both on revenue and billings, so we see a lot of opportunity and we have a lot of strong momentum and we're focused on building customer relationships that drive that growth. >> i know -- look, there are legitimate issues about and your departing cfo talked about it, cell phone renewal shifting from q 2 to q 3, the largest federal customer and that might be part of the nexus i don't think i should read weakness in your business into that statement. >> not at all. jim. that in particular case and again, the reason it impacted
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things was government ourself hosted with regulation 606, county regulation 606 is how it's accounted for that case was a large federal agency that is expanding our relationship and pushed the renewal into q 3 where highly confident we'll close and we have a tremendous federal backlog in q 3 in pipeline and so we're feeling very good, which was reflected in our annual guidance, raising annual guidance we can't control what happens in one quarter versus another down to the knit and overall, we feel very good about our annual guidance and raised it and we feel very good about our business. >> all right again, i want to clarify something that an analyst asked for the call one analyst said it looks like the full year increase was less than what we saw q 2, an implicit guide down to the second half. that's not really the case, is it >> no, mike answered that question three times on the earnings call, jim. >> i know. >> what basically happens there
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is certain renewals got pulled into q 2 so that was reflected in the q 2 billings and therefore doesn't change our full year billings guidance but it accounts for it earlier in the year we actually raised billings guidance for the year 5 million, which reflects the fact we're increasingly and continue to be very optimistic in our business. >> so glad you said that i read this thing over and over and said come on that's their job their job, i'm more interested on things like your mobile app and how people love that at the workplace and that's what they are asking for that's what i want to know about things like invasion you're doing. >> well, our customers spent so much time with our customers and our customers are very excited about mobile coming to the enterprise it's been a long time and coming, our release in q 3 will have native out of the box consumer grade mobile
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capabilities so now any service now customer can have a brilliant mobile on boarding app so that their new employees can get up to speed quickly, seamlessly and show a young new employee, a millennial you are a modern company that helps get them on board and productive quickly also the now mobile app that will allow up ever employees tot problems reported and dealt with and information like my approvals are in one place every morning. i can check them we're very excited about the mobile capabilities coming in q 3, native out of the box so every one of our customers can build them in a low code, no code way. >> that is what -- >> mobile coming to the enterprise, finally. >> that's what is going to drive things i have to tell you, you have been just so frank with us and i wish i headadn't had to get in weeds on something that wasn't right. it's a great opportunity for people that watch our show to
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say i don't know why that stock is down. i heard john say things are good isn't that the real take away? >> we feel very good about our growth we feel very good about our customers, very good about our prospects and just focussing and executing so our customers get those great experiences. >> that's all i need to know thank you to john, the president and ceo of service now with another great quarter. thank you so much, sir stick with cramer.
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facebook in washington very bad. facebook the company very good i saw a lot to like including they remain the best alternative and give you much better results. i'm taking their word when it comes to tv versus facebook and that's something that hasn't gone away at all it's getting stronger. there is always a bull market somewhere. i promise to find it for you on "mad money." i'm jim cramer and i'll see you tomorrow amber: alright. ready?
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let's do it. you want some pizza? lemonis: i thought i was never gonna eat pizza again. amber: well, you're not eating simply slices pizza, but, i like these guys. [ whimsical tune plays ] [ chuckle ] ♪ is the crust good? lemonis: it's better than simply slices's. amber: yeah. lemonis: you're not supposed to talk with your mouth full amber: no. lemonis: while you're chewing, right? amber: mnh-mnh. okay. let's continue. lemonis: tonight, we're gonna give you an inside look on an episode... amber: from season 5 called "simply slices." lemonis: maybe one of the most maddening, frustrating, amber: mm-hmm. lemonis: discouraging -- what's the word we want to use? amber: it was just odd. lemonis: when this episode first aired,


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