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Plus, MetaShares are set up for what could be the worst day the stock has seen in years. The company's surprise investors would plan to spend even more aggressively on AI. Also, that second quarter's guidance, perhaps not that exciting. And on top of that, we got a massive earnings day, of course, Comcast. Five Dow components also reported. We got Murrick Honeywell, Caterpillar, Dow and IBM. One of the biggest laggards on the SMD, by the way, ahead of the open. Let's begin with the market reaction to the weaker than expected of GDP, Jim 1/6. Looking for two... No, prior, S1 was about 2/5. Goldman was at 3/1. Right. This is one where people are obviously in the wrong way on both. Wrong on how slow it is and wrong on inflation. So the Fed needs some help. You can't just... These were numbers where you could say, you know what they can cut. But David, you don't cut when you have this kind of inflation. So the core price index up 3.7, you're looking for 3.4. You don't have a... What are you smirking about? These are awful numbers. I'm not smirking. You're smirking. No, I was just looking at you happily. Happy to see you. My gosh. What am I, your kid? You bring me to work today? Listen to me. GDP... No, you know, the worry now is stagflation, right? It's like... Well, I was... I was leading to that. All right. Well, I beat you to it. Yeah, you did it. But look, stagflation to people who aren't familiar with things, means that there's nothing you can do. The Fed can't get inflation under control, so therefore it can't cut rates, which therefore makes it so you get today. So you get a weakening economy, or is this just some sort of weird one-off? Or is it reflective of kind of these things you've been talking about? I've been talking about a little bit as well. You're watching crummy months? When you hear, you know, restaurant receipts and things, various things like that diesel prices, I don't know. Look, you've got a frugal consumer. Thank you, Goldman, for upgrading TJX. We have industrials just doing okay. We've got caterpillar, and we don't have that revenue raver, the race I'm looking for. We have tack, where you have service now. They're going to be coming on soon, and this stock is down very badly. And one of the reasons is because people say, "Well, wait a second, they didn't raise as much as they usually raise." Now, that's the kind of false positive. In other words, they're still raising. But what in a massive, David, is just you're struggling on a day like today to say, "Okay, what do I do? I got this 10-year 4.7. I was told that if it didn't hold 4.6, then I should settle." And not to mention, we haven't seen 5% a little while on that two-year. She's hello. I bought that two-year for what? This early this week. I'm already taking a beating. Imagine taking a beating on it two-year. Well, I'm not giving up on it because today is a tough day. But look, we left here last night and we could say, we left here on Ford and Ford's great. So, Joe, this is talking about how we have a part of Ford that is worth the price of Ford. Do you want to go through the names that raised guidance? Yes, thank you. Mark Ford, Royal Caribbean, Chipotle, Waste Management, Align, LRCX, S&P Global. Yes! Wow! Yes! But then all that and a 5-plus percent two-year will get you a down mark. No, Carl's right. I mean, we're sitting here and we can bemoin' everything. Look, a lot of the 1.6 number is net exports and inventories. Are you still got consumption running 2.5 and we'll see. But it's not. The stagflation's a little extreme. I agree. I'm just... Look, I wanted to give the conventional wisdom because people are going to say, "Well, wait a second. Why is the market down?" And 4.6 versus 4.7 is not that big a deal. But what's happening is that, let's say earnings beat, but sales weren't that good today. Well, we're only looking at the sales. So, Waste Management, which I have on tonight, the sales slipped. Well, this stock has been a horse. I mean, even let's see the elephant in the room, okay? So, what has Matt had done this year? Matt has done nothing but go-ups. That was a 40% year data, 135% or year over year. And we're going to complain about it today. Now, I think Waste Management isn't absolutely terrific coming. Again, I have one tonight and I hate to say this and Jim Fish, please don't say it, but they're run of the mill. Good company. And a good indicator of industrial activity. Exactly. We have ways to look at the economy other than the 4.6, 4.7 conundrum. But we also know that when you get a company like Meta lowering the boom and you get a company like Service Now, not raising enough, and people start saying, "Okay, I've got the bonds going the wrong way. I've got the GDP going the wrong way. Maybe I have to trim." Now, I don't think that's wrong. That's what I said. And yesterday I had this really very... I was apologizing to club members saying, "Look, I hate being this naked, but I don't have the horses. When you're not on the horses, you can't ferment the horses." To Jim's point about Meta and Zuckerberg last night raising the CapEx guidance, rekindling fears of a new investment boom, take a listen. It's significantly more over the coming years to build even more advanced models and the largest scale AI services in the world. As we're scaling CapEx and energy expenses for AI, we'll continue focusing on operating the rest of our company efficiently. But realistically, even with shifting many of our existing resources to focus on AI, we'll still grow our investment envelope meaningfully before we make much revenue from some of these new products. Are you worried about the office in the year in discipline? No. Look, it was only... It was a year of efficiency. It wasn't necessarily years. And when someone has something to invest in and it can give you a good return, then someone who is rational is going to give it. Now, what he does say, and there's really some great lines in the call, it's perfectly investing to build these new scale experiences, which is what he's doing, our apps, has been a very good, long-term investment for us and for investors who have stuck with us. Now, why doesn't he deserve the benefit of the doubt? He does. And I'm giving it to him. He does deserve the benefit of the doubt, but you have to also take in mind that the next quarter where the guide was not as high as had been anticipated. By the way, they're going to start to lap those big concepts that they saw as a result of Xi'an and Timu spending enormously on the platform. And so that makes the revenue guide a little less than perhaps had been anticipated. And then there's a $40 billion number just to sort of stop for a moment and think about that. Because in fact, there were to hit it. That's the very high end of that envelope, but $40 billion in CapEx, the number itself is a staggering. As I quote him, smart investors see the product as scaling and that there's a clear monetizable opportunity there, even before the revenue materializes. In other words, you don't have to wait until the numbers explode. You've got to get ahead of it. Witness how much this stock is up last year and this year. Still up almost 20% for the year. I'm defending him. I think you can actually buy the stock, you wait a couple of days because obviously this guy just want to get out. Listen. Any doubt? Look, he, he, what on the next quarter? He didn't tell you to buy it ahead of this quarter. No, he didn't. And there are still plenty of people who have a $24 share earnings number for 2025 and believe that it should trade at a 20 multiple, which would mean right back to 480 if you believe that. 18 gets you right around where we are right now. So, you know, that said, it's going to be a little while till we see these products and you say it gets a benefit for the dad. Yes. Very well, probably deserves that. Yes. But it also does raise some concerns, even though they have 30,000 fewer employees than they did in November of 2022. Right. Obviously that's, you know, you have a situation where hardware costs more. Now, what are the takeaways? Evercore. Really good piece to say. Winners, Nvidia stock is going to be down today because it's part of a cohort called Tech. All they just did is tell you how much money they're spending on these chips. I know. It's costing a fortune. I got a great one for you. Yeah. Who's the second on the evercore list? I don't know. Who? Who joined the board in February? Right. Hot to end. Yeah. Like that. That's an interesting thing. You think? Now, he sets up the energy cost. Now it's speaking to GE Varnova, which is Scott Schrazeck. The amount of cost of energy for the first time in years is really going much, much money. They're going to have to compromise. Every one of these companies are going to have to compromise to start using natural gas. They can't just rely on wind and solar. But also, Jim, it's, you know, it's one thing when an alphabet or a Microsoft or an Amazon, even their CapEx, particularly when it comes to the spending they're doing is hyperscalers in the data center. Right. Because that's just money they're putting in that they immediately charge customers who are using it for. This is different. This is new products that conceivably are going to be based, by the way, on the incredible amount of data that this company has that is makes it unique in terms of the personal data it has to, you know, but everybody can come up with their own guess. Is it going to be an AI agent that helps you create content? Is it going to be your own personal agent? It's going to be a search. I mean, dynamite search. What is it going to be that ultimately they have and it's going to be exciting? Somehow it's going to be merged with reality labs where they've already spent, what have they spent overall? 40 billion dollars on reality labs. That's a questionable question. So far. So far. Yeah, listen, they got the Raybans. They did this morning when they said this morning. I saw that. I saw that. And new fashion styles. Raybans is crushing it. New fashion styles are coming. Don't laugh. But do you know how many companies would kill for some invention like Raybans? How about a car? He comes up with this thing called reels, okay? It's a competitor to TikTok. The president signs a ban on TikTok and he's got reels and we think he's not worth trusting? I mean, for all the protestations yesterday by TikTok, information this morning saying they're beginning to game out some sale scenarios. Yeah, I saw that. The reels is going to just be selling at least some portion of TikTok. By the way, on the reality lab spending, I did note another part of the call that thought was interesting where he's talking about how we report our financials as a family of apps and then they also report reality labs. But then an operating loss of, I think it was 3.8 billion in the quarter, as I said, maybe they spent as much as 40 billion on this thing. Remember, they changed the name of that company, Dometa. That said, Jim, he goes on to say, I think, fundamentally, they're the same thing with the vision of reality labs to build the next generation of computing platforms in large part so that we can build the best apps and experiences. So over time, we're going to need to find better ways to articulate the value of this generator here across both segments, meaning maybe they stop breaking reality labs numbers out. Yeah, I think they have to. Is it AI bleeds into reality labs or vice versa? 300,000 of just the humdrum, the humdrum infinity chips. What, H100s? Yeah. I mean, what's he going to do when he gets the black well? Although, of course, Amazon wants the black well in it. Now, of course, we say that everybody, all these companies are making their own chips. Yeah, well, they're making the low end chips. You're still relying on a video. And I know that it's fashionable to sell Nvidia these days, but when the smoke clears and it hasn't yet, Nvidia's the winner. When we come back, we're going to see how many earnings we can get to in one block or two on this busy Thursday, plus the CEOs of service now in Southwest shares a both company under pressure ahead of the open. We'll look at Merck, Bristol IBM, Kat, Chipotle, Honeywell, Harley, and a bunch of others when we return. For more than a decade, Comcast has been committed to bridging the digital divide and connecting millions to affordable high-speed internet. But the barriers to get connected go well beyond affordability. 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Things are just fine, Jim. We had a triple play. We beat on the top line, we beat on the bottom line, and we raised our full year guidance. We can all debate that I increase the guide enough, but that seems to be a pretty high class problem because ServiceNow has become the AI platform for business transformation. To prove in that, the number one Gen AI use case in the world today is process optimization. So Jim, in terms of things being fine, think about every business workflow and every enterprise around the world is going to be engineered with Gen AI at its core, and we are that single pane of glass that's going to drive that transformation. Okay, let's talk about that because after listening to Mark Zuckerberg last night, he says that Gen AI costs a fortune and there's absolutely no return within a couple of years. That is the return instantly for Gen AI for ServiceNow, and really Mark Zuckerberg just basically forget it. We're going to spend billions and you're going to get much from it. Yeah, we're making a lot of money on it already because we have small language models that are domain specific, which means they don't take a lot of compute power. They're lightning fast because we're working with the customer's own data and they're highly secure again because it's the customer's own data, and we also remain open to the ecosystem and all the models because they fully integrate with ServiceNow, should the customer wish to go that way, and that's the best of both worlds for the customer. Totally open, but at the same time today, we're taking great companies like Microsoft and IBM, they're transforming their employee experience with digital first support models, freeing up resources and fueling innovation with ServiceNow's Gen AI or Novartis, a great CEO delivering new drugs while increasing operating efficiencies and he's streamlining clinical trials, research and financial management with Gen AI from ServiceNow, and we're billing for that right now. So the game is on at ServiceNow. Well, right, again, and I totally agree with that, I'm looking at the stock being down, I'm looking at people feeling a little jaded about Gen AI, and I'm wondering if I worked at Novartis, how am I impacted by ServiceNow? What makes my life better? How am I more productive? How am I bringing more to the bottom line? I need to know this because this is a day where your stock is down and people are feeling very foolish about buying stocks that are making a lot of money off a so-called Gen AI, and I put the so-called end after listening to Mark Zuckerberg, who is a darn smart guy. He sure is, and we admire him greatly, and he's got a great company. We just have a different approach to this, and the proof is in the pudding. I mean, our free cash flow was up 47% year over year. Total gross profit of 83% year over year, so we've proven that we cannot only grow the top line, but also the bottom line. So here's what's happening, Jim. Let's take employees and customers. Think about Gen AI deflection rates. They've doubled in all of our installs, and they're improving every month. So the sole crushing work that people don't want to do, they don't have to do anymore with ServiceNow. Talk about software engineers, 48% increase in the speed to innovation with natural language text turning to code. Think about security and risk, Gen AI, remediating vulnerabilities, and improving the security posture for companies, and I can go on and on. These are use cases that we're doing right now, so the CEOs that are out there, they want a flag in the ground on Gen AI, Microsoft has done a great job with their solution, and they're giving a co-pilot, and we're teaming up with Microsoft with our now-assist AI co-pilot. So just think about a CEO listening to the show right now. You want to team up with Microsoft, you want to team up with ServiceNow? Total engineering integration, total teamwork. Let's go. Right, so you said software engineers doing better when I listen to Jensen Wong. He's saying we don't need software engineers like we used to. Are you able to eliminate software engineers because you're talking natural language, why can't I just talk to the machine, why do I need these code letters? It's a great question. We still need our engineers, Jim, because we're going to be the defining enterprise software company of the 21st century. So we've already improved their productivity by nearly 50%. So you could say, do I need half the engineers? No. At ServiceNow, we say we need all the engineers, and we're going to keep hiring them because we intend to define the enterprise software market in this century and give customers an entirely new experience, and we want our people fired up innovating at clock speed. Okay, I don't understand that. And what I'm trying to do, again, is deal with the research, which talks about how they did expect a bigger guide, and what you're saying, which would indicate that you could have blown the doors off, and I'm wondering whether maybe when we go to your big meeting that is upcoming, your financial day, maybe we'll hear that perhaps what disappointed these skeptics, these analyst skeptics, they may regret that they were skeptical about the billings when they hear what you do at your conference. Hey, Jim, let's face it, right? Five years of this, the execution has been stunning. All the research reports that are going out today say near perfect execution. I'll take that. We know how to win the game. We know how to execute, and when they see what we have in Gen AI solutions, the speakers that are coming to endorse that, the logos that are already using that, and the many more that are signing up, they'll see that while it's a small percent of today's revenue, I mean, we're a 10 billion run rate cloud company, they'll see that a half a trillion by 2027 will be spent on Gen AI. And if you think that the number one use case is process optimization in the enterprise, you've got a pretty bright future in front of you with ServiceNow, and we always beat our forecast. So that's the ball game. We're going to win it, and we're excited. I think people will know that at the May 6 meeting in Las Vegas, the financial analyst day, and I think the problem is a lot of people don't understand process optimization, but all I know is we want it to be cheaper than it is right now. That's Bill McDermott. The stock is down. That's been down when the first quarter, because he tends not to take up the numbers big because Bill McDermott likes to beat the numbers, and he sure did today. Bill McDermott ServiceNow. Thank you so much. Thank you so much, Jim. Absolutely. When we come back, Kramer's mad dash, countdown to the opening bell. The open does look to be a little spicy as that 10 year zeroing in on four and three quarters. Don't go away. You seek the key, but first, you must learn the ways of precision, craft, and performance with Acura's all electric ZDX with a premium bang and all of some sound system up to a 313 mile range and a type S variant with an estimated 500 horsepower, the ZDX is their most powerful SUV yet. Unlock the energy when you visit Acura.com to order yours today. Futures decidedly red here. I made this earnings blizzard weaker than expected GDP 10 year now close to 475. We're going to get the opening bell in five minutes. Let's get to a mad dash. We talked about earnings from so many companies. One of them is IBM. The stock, Jim, is looking down rather sharply in the early going here. Why? Well, there was a step back in consulting. All the analysts said that consulting not being that strong had been in the business that had been strong. I think a lot of people were hoping that look, they built this passion corp to go into cloud business. Yes. That seemed to be very hard. Yesterday. But at the same time, you have like 20 second a yes, right? I love this question. It's always incredibly trenchant. Yes, trenchant, trenchant questions. It says, some are actually sold about an outsized market reaction. And I think you do down 20 is an outside market reaction. It's just not that bad. It's just that you take something like redhead that used to grow in the, you know, pretty good double digits. It's growing, you know, high single digit. You take a look at what they've done in terms of the rationalization, selling, you know, floating Kin's role and making the thing grow faster. And a lot of people are just kind of saying, all right, well, that's about it. That's all there is to it. I think that's too critical. I like their cloud business. They're fine. They should be down 20, make it down 10. The business was squishy now for cash flow generation. So it's okay. It's better. It's better than I thought. Now here's what I don't like that the analyst like I'm a little bit of a critical moment here for AI. People like the fact that your AI business exceeded $1 billion. So all the analysts like it, no, I don't think this, you know, that's not good. They're all happy with the $1 billion AI. I keep coming back to what I heard last night, one minute, which is don't get all that excited about short term games. I know Bill is talking about process, making process cheaper, I get that, but in the end it is too. Let's get the opening bell and the real time exchange of the big board. It is Rebrick, the Microsoft back cyber security company celebrating its IPO. We're going to talk to co-founder Chairman and CEO, Dipple Senna, in the next hour, pricing above the range at the Nasdaq, a global financial services platform. Jim, it's a rare day where we got earnings, macro, M&A times two, and an IPO. Yeah, I know what you want to ask about it, Rebrick, Rebrick, because they lost $354 million from 628 million in revenues, which is, I think, some optimal. However, it is what loved by the best cyber security people I could focus on. There's no reason. So I like that. Obviously, we like deals that are a little more make more money. We don't want companies that are losing a lot of money, but this thing, it'll trade well. People are excited about it. But your appetite's not wetted. Well, look, I like CrowdStrike and I like Palo Alto, but CrowdStrike likes Rebrick. I mean, there's no doubt about it, it's a good company. At the same time, we are stuck with a tape today that is not all negative, I mean, look, you've mentioned Rob Davis, absolutely terrific, I mean, it's great that you can go and that you have a crystal Mars. You have one and then another, one and then another, and you're in a situation where because of what happened with Meta, people are saying, wait a second, like, I'm more critical, because when you use someone really smart, like Zuckerberg, say, we're going to have to spend a lot of money, you know, to pay off eventually. Now, remember, Bill will say, Bill McDermott is saying, look, we're, our customers are doing well, so we're going to get paid. In this particular case, Zuckerberg is both the customer and the guy who's building and he's not going to get paid instantly and that is casting a poll on this. Now, I have to tell you, now Caterpillar, Jim up will be, has done a fantastic job and the stock is up from 208 when he talked last time and now the stock is, you know, it's down 25, that's nothing, that's nothing and Caterpillar had good numbers, but in a market where it's stocks up from 208 to here, profits, when you have Meta up more than 100% profits, so there are situations where you have a lot of profits to be had and people are taken. Yeah, Caterpillar, with a slight revenue miss. A slight revenue miss to that about, inventories were fun, but if you take a look at IBM, David was mentioning IBM's been doing pretty well. So, yeah, it had a good year, I mean the last 12 months up over 40%, so people are taking some profits. I don't know, that's what, when I, in my club, I said, geez, I hate to say it, but I got six stocks I think would do, do well short term and well, yeah, there's just not enough good today to make up for things, but I look at a stock, I'll give you a, Honeywell, okay, Honeywell, one point today was at 200, it was up five bucks, it's now up 50 cents. I was going to say of the Dow earnings we've got, Honeywell, Dow and Merck are all in the green. I spoke at Jim Fiddle in this morning for Dow, it was a good quarter, a lot of things go in their way, they have very inexpensive U.S. cost versus everywhere else in the world. It's up 60 cents, now even it's down now, it was a good quarter, it yields 4.9%, there's a lot of companies that did good quarters when you went to great quarters, and then there are a lot of companies that did fantastic quarters and gave you not as good for guests, Bill McDermott, but Bill at Service Now would argue, are you kidding me, come on, I'm a conservative guy, I'm doing really well. I keep coming back to, Meta is in control, Meta and the Vines, and Meta's, look, when a guy says, trust me, well David, I'm from the government, trust me. Although the guy is Mark Zuckerberg and he may be dressing nicely, but he's still a cold blooded killer, and I say that the nicest way. Well, that's an odd way to put it. The killer is just a good group. Well, you know what? I would buy Meta here. I mean, he is singularly focused, has been since the dorm room at Harvard, and the man can execute, and so to your point, doesn't he get the benefit of the doubt? Well, he very well may. That said, when people do the math, especially on the second quarter guidance, which again as we pointed out, a year ago is when the Chinese e-commerce company started to spend enormously on the platform, start laughing that, your revenue numbers are not going to be up as much, although, will you pay for this thing? I mean, really, you can only pay if they're going to do, you know, like it. I mean, he's going to come out, it's going to figure out how to monetize it faster than he says. That's terrific. Doug, do you think that there's a read-through Microsoft? Do you think it's read-through Amazon, because it's up 10 moo and she in? How about that? Well, no. Well, the only, it's not like they're spending is still going on. It's just that it ramped up like a year ago, and so your comparisons for these companies may not be as significant as they were, because you're coming off the quarters where they already were spending a lot on the platform. Those Chinese e-commerce companies represented a lot of what was going on. I know. They spent the fortune. They did Amazon, too, and I remember Amazon. On Instagram. If you buy some of their stuff on Amazon, which by the way, their stuff is about, there's no accounting for taste, but I don't regard their stuff as being that great, but Amazon gives you a date, and these guys don't give you a date. It was like, hey, it might come like, not, I mean, you buy something to Amazon, but it actually tells you it's there at your door in about 35 seconds. It's a little scary. I don't mind Amazon here. Parent company reported earnings, guys, as you well know, it's the only time Jim doesn't say anything. Oh, yes. You got quiet. Look at him. Can we get a shot at Jim? Although there are some firms coming to Comcast defense this morning, talking about broadband ARPU up for? Yes. Rob's been ARPU. By the way, the financials themselves seemingly met many of the estimates of the analysts who follow the company. Right. Even that loss of $65,000 total broadband customers was more or less where many analysts had been. The first quarter revenue, which was up 1.2% year over a year, was a bit better than the consensus. The EBITDA numbers perhaps, depending on which analysts you talk to or follow, was more or less in line or a bit below. The 1.9% percent. But there's kind of a quick read, right? Wireless keeps growing. Peacock? Yeah. Now you go into domestic video. You like doing domestic video. But you're losing. You're losing broadband customers. You're a broadband company. And then, no. You're not. You're not. You're a technology company. And that's the problem. Do you mind if I do a little narrative for a first second? Well, let me come to the reason why the stock is actually down, which is really off the call. You're going to do domestic video. Just do domestic video. Well, domestic video is for the entire industry, right? You're still losing 487,000 subs. Okay. That's not great. Now, a year ago it was 600,000, but last quarter it was in the three, so that's accelerated quarter to quarter in terms of video sub losses. That's the entire ecosystem we talk about so often. That's cord cutting. That's not that important of business for Comcast, frankly. That's about broadband, and that's why on the call, when the CFO said this, the stock went down. Take a listen. It continues to be a very competitive environment, and we lost 65,000 subscribers in the first quarter following the loss of 34,000 subscribers in the fourth quarter of 2023. As we sit here right now, we do not see this trend improving in the near term. We expect churn could be elevated given the end of ACP, which is only fully funded through April and partially funded through May. The Affordable Connectivity Program, a government program to get people broadband in areas and help them pay for it, will expire. We talked about that being an issue, but that's why the stock, it was more or less flat on these numbers. Even though they're not great numbers, they were in line, if not better than someone anticipated, but then that, and that took it down. But look, you come out hot, and you look at a broader number, and the stock's up a dollar and a half when it reports again, and then people look under the hood, and they don't like it. I want to point out some things, I just want to, and you tell me what they mean, okay? So Peacock does 1.05 billion people look for 1.02. Matter? No. No matter. Okay. Okay. Peacock has got to be some scale. It's not sustainable. Okay. They no longer be at the company after I said this now, but that's more or less than you. There are wing losses and subs up 55. Thank you. Yeah. Experiences, 10.3 versus 10.3. Experiences. Experiences are great. It's all about theme parks. Awesome. Okay. Love them. All right. broadband revenue, 32.1 versus 32.3. What was that? Broadband revenue. That revenue was fine. Okay. Our poo was up. How about being the first studio to finish number one at the box office, and win Best Picture this century. Then you go. Oppenheimer was amazing. Yes. You tell me. We're G Robins of record. Hey, it's Soy, it's Soyling queen. Now listen to me. This is not that. $4 versus $1.00. How about that? That was fine. Jim, among the winners today, I know you like Chipotle concept seven. Thank you. Looking for five. Stock got to 3K ahead of this 50 for one. Yep. And they're going to split it. Not till June, unfortunately. Now, the most important thing there, and I'm glad you brought that up because otherwise people are going to hang themselves, is that they raised the prices for California mechanically. No. Jim, you niche. None. Mr. Quinn. That's the product. There's a piece on the tape right now. They're telling employees not to serve chicken in their own meals because of the demand for this introduced re-introduce chicken. When we celebrated by having the chicken outpost story yesterday in our office, we said, hey, you know what? This is going to be a fantastic number. And it was, they, if you want to have pure joy business school, not speak, they talk about throughput. And they have this Boston store that had like throughput that was just unbelievable. This is an amazing company. It is a lesson. It should be. People should read the conference call rather than just pay attention to all the negatives. I want to accentuate the positive right here. Our syllable covered American earlier this morning. Then there's Southwest moving lower on their results. Phil, is it Southwest Stage Q in Dallas with a special guest? Hey, Phil. Hey, Carl, looking out on Lovefield, Bob Jordan, thank you for joining us. You're welcome. Let's be honest. You miss on the top and the bottom line, ugly first quarter, and people are looking at your guidance and the cut and capacity. Investors are saying to themselves, when does Southwest start to grow again? Because I feel like the ground continues to shift under us. Well, we had a strong first quarter, despite the financial results. We had record operating revenues. We had record passengers, record rapid award member ads. But we have a number of markets across our network that are just not performing. So we're taking action. We're further optimizing the network. We never liked to close cities. We're closing four cities. We are cutting capacity in Atlanta and Chicago here, and we're restructuring other cities, and taking other actions. And we're committed to doing this until we hit our financial returns. Let's talk about the max planes. You started this year expecting to receive 80 max planes. You keep having to cut it down lower and lower. New guidance is what? You're expecting 20? How much is this hurting your ability to plan? You know, we just started with Boeing at the very top. We support Boeing taking the time to fix their issues, become a better company, because that is good for Southwest Airlines in the country long term. But there's no doubt this is a significant issue, re-planning, adjusting schedules for our customers. And yeah, we're significantly down from our originally planned deliveries, but that's not going to be an excuse. We need to hit our financial targets, and we'll take action. We're adjusting our network. We are tuning our revenue management system. We are taking marketing actions, and we're looking at new initiatives, things like the way we seat and the way we board our aircraft. Let's talk about that. For the longest time, this has been an airline where you buy a seat, or ticket, you pick the seat. Generally speaking, is there a possibility we may see a business class or some type of a bifurcation within the cabin? Well, there's nothing to report today, except the fact that we are studying this. We always want to know what our customers expect, and their preferences. So we are studying our seating and our cabin right now, and again, there's nothing to report today. But customer preferences do change over time, and customers love our current product. I love our current product, but it was designed at a time when load factors were significantly lower than they are today. So we're working hard to understand what our customers want. We've changed before. We've added things like Wi-Fi, power, larger overhead bins. And you know, it's very early, but the results are interesting, and we're continuing to study this and more to come later. That's a tease. Jim, I know you've got a couple of questions for Bob. Hello, Jim. When you're starting to end operations, I wonder how much of these ending operations are for good, and how much it was because of Boeing. George Bush's International Airport, Bellingham International Airport in Washington, Syracuse, Hancock International Airport in New York. How much excuse? Cosimo International Airport. How many of these are the full of Boeing? How many of these are just saying, you know what, we're not making up money here? Well, we have got to get our financial returns, period, and get back to where we are covering our cost of capital as a first step. So the network actions have really nothing to do with the Boeing delay. We're taking network actions regardless. Now, the Boeing delays are very painful. They cause us to re-plan. They hurt us on the revenue front, they cause us to be inefficient, and we're working all of that. But no, the network actions will continue along with the rest of our comprehensive action plan. Well, you know, Bob, I guess I'm spoiled here. I listen to Phil about closely and Phil interviews, everybody in the industry, American number look bad, then boom, you know, number is better than I thought, Delta is better than I thought, United better than I thought, I don't want to see you down there with Jet Blue in this scrub. Well, the demand for our product is very strong, Jim. I mean, we, again, we had record revenues here in the first quarter, record passengers, and our sequential, and while we were off our plan, our sequential revenue performance from the fourth quarter actually was higher than historic norms, and our guide would imply that our second quarter will be sequentially the norm from the first quarter. I'm not underplaying the fact at all that we have a gap to our financial targets, and we will be absolutely relentless in pursuing those. We have work to do, and a lot of that is around the underperforming part of the network. We've taken action before in the first quarter. That has been very helpful in its own plan, and we're taking further actions here in the second quarter, and we will take more actions with the network as we need to, along with all the other parts of our action plan that I described. Bob, are the underperforming areas, are they specific markets? Have you been able to identify why specific markets are underperforming? Or do you look at it and say, there's a weakness underneath, generally speaking, in terms of demand? Well, you know, Phil, the big thing that's changed, obviously, is costs are much higher. Labor costs, especially, have come up a lot, and it typically takes, you know, the revenue performance a while to catch that. But no, we can easily identify areas, particularly in our development markets, and we added a lot of capacity last year as we restored our network and got all of our aircraft flying, so we have a lot of capacity that is in development today. So no, we can see the areas of underperformance, and that is what we were attacking. And you've done a lot of hiring, especially as you planned on having a number of planes being flown pilots. Have you put a pause on that? We did. Yeah, we were aiming at, in a lot of cases, you aim a year out, particularly with pilots. We were aiming at where we thought our aircraft and our fleet plan would be a year from now. Obviously that's changed. We have stopped and frozen, nearly all hiring. We have voluntary programs underway, and we expect to end 2024, 2,000 heads below 2023, and we'll be down again in 2025, and through our voluntary time-off programs right now, we're already seeing nearly 1,000 employees take those, take those programs. Changes in the air. Bye, Lord. Thank you, and happy birthday, my friend. Thank you. That's a number of people today. Guys, I'll send it back to you. Stole my thunder, Phil. I was about to wish you a happy birthday, too. Great work today. It's our Phil LeBeau. Jim, reaction to some of the airlines here today between American and Southwest? I feel like, look, I hate being tough on Bob, because, obviously, if you don't have enough new planes where you want them, he did not blame Boeing. He didn't. I mean, I've tried to get him to say. And there's no more pure Boeing story than Southwest. And, look, I think that he's dealing with the hand that he got, and within that confide, I mean, look, when I buy the stock here, I mean, I think he was saying, listen, we're going to work the kinks out. It's still Southwest. I didn't mean to be as, you know, look, it's just that everybody else is doing so well in this industry. I mean, when you say to me, listen to Delta, and you say, well, I got a pie delta. And you listen to the United, you say, oh, man, I got to get United, and he was in Southwest to say, eh, not yet. I didn't even mention RCL today, and the quarter there raised guidance. They're doing it. Well, that's experiential, and that's a real bargain. I think people feel like we get on a plane. It's not a bargain. Get on it. Get on it. David, I don't know when the last time he took the cruise, but they're cheap as a cruise. How's never? Never good for you. You know, David, what? You know, you know, when I had my cruise booked, February 22nd of 2020. I remember. Yeah, I was going to be his next to Katie Carter. Nice. Have you taken one since then, in the last four years? No, my daughter was wondering, she was on one of those electronic music cruises. EDM? Yes, she's an EDM. I don't like that. Poor day EDM cruise. I love that. Vikings come to public. I sold to you. I like that from therapeutics. As we go to break, Dows Down 570, about a third of that is going to be caterpillar. I keep that in mind, but all sectors are red except for consumer staples. As for bonds, we mentioned the Q1, PCE price index running warm, claims at 207, lowest in February, and then we still got to get through this seven-year note auction at one o'clock. Stay with us. A lot of kids getting treated to some interesting market activity. Dows Down 600, it is, take your children to work day. Look at that. Aren't we lucky to get some kids and then go with lists? No, some good news. They look good too. But when they were that age, they were so excited. I was miserable. I was in the fourth track. Have fun today, kids. We're back in a moment. Let's get to jam and stuff. We have a winner. Just carrier. I've got to tell you. This was an amazing quarter. Carrier made these great acquisitions in Europe that brings in the heat pump business. They got rid of some things that will be able to make it so they have a great balance sheet. Dave Gittlin, Dave Faber, is a remarkable executive. Probably people are wondering, will he take moving into the Boeing job? And he says on the call, Jim, let me be clear, and this is David Gittlin, who runs carrier. I have notified the carrier and Boeing boards that I am 100% committed to carrier and not interested in serving as CEO of Boeing. Well, you know what? Sometimes you get this. He's on the board, by the way. Look, think about this. You've got Judy Marks of Otis, and you have Dave Gittlin, a carrier. These are clinics. These are people who know how to run a business. Otis is doing incredibly well, including in China. And Dave Gittlin doing remarkable, and carrier. People initially, when they did that acquisition, they hit the stock. They're proving wrong. And my congratulations to Dave, who was also, by the way, one of the nicest people in the world. Nice guys, finish first. Very nice. Jim, we got Microsoft down four and a half, Google down four, headed tonight. Well, good at least they're seasoned. Kind of like my father in those nine hot land, he said, "Hey, Jimmy, they seasoned the beach with a lot of it." And then you got there, and everyone's shooting them anyway. So you got W.M. tonight? Yeah, W.M. Look, I mean, Jim Fish is doing fabulous, and I'm just saying, as I want to take his to that great golf game that he doesn't finish. Oh, the stock is, it's crazy that the stock is down. I got tractor supply that's empty clothes, and then I go, I always like to make the measure on food, and I can't see how it's fantastic, and I go is down. So carriers of David Kill Comcast, and that's all I have to say. Oh, hash equipment, there you go. Kill. You're going to stay on this? He shot a peacock today. It is a tough tape though, Nasdaq now a two percent decline, and the Dow down 640. You've been listening to the opening hour of CNBC's Squawk on the Street. 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