Closing Bell - Closing Bell Overtime: T-Mobile CEO Talks Latest Quarter, What AT&T and Verizon’s Lead Pipes Mean For The Industry; Is Intel’s Turnaround Kicking Into High Gear? 7/27/23

Episode Date: July 27, 2023

The Dow closed lower…finally. Today broke a thirteen-session winning streak. Bespoke’s Paul Hickey and Annandale Capital’s George Seay break down the market action, and earnings from Intel, Ford, T-Mobile, Roku, Live Nation, Mondelez and First Solar. T-Mobile CEO Mike Sievert talks the company’s mixed quarter and what the legacy carrier’s lead pipes means for the industry. Carrier CEO David Gitlin on the company’s strong quarter and the market for air conditioning amid the nation-wide heat wave. Wedbush’s Matt Bryson breaks down Intel’s quarter. Third Bridge’s Jamie Lumley talks Roku’s quarter. 

Well, you can't spell down without Dow. Oh, wow. And at least today that's relevant. Didn't get that 14 streak. Welcome to Closing Bell Overtime. Winners stay late. I'm John Fort with Morgan Brennan. And the Dow, yes, snapped that 13-day winning streak,

closing the lows of the session off more than 200 points. Meanwhile, the busiest day of earnings season rolls on into overtime. We've got results from Intel, Ford, Roku, Live Nation, Mondelez, and First Solar, just to name a few, just moments away. We're going to bring you those numbers as soon as they hit the wires.

T-Mobile's earnings are also on deck. The company's CEO will break down those results before he speaks with analysts on the call. And let's get right to it. We've got George C. Annandale, capital founder, and Paul Hickey, bespoke founder, here with us. George, we've just about given up the week's gains on the S&P. It's not that earnings news has been bad, but Alphabet and Meta just haven't been enough to pull the rest of the market higher.

So are the results that we're going to get this afternoon and evening, moments from now, going to be enough to change the sentiment? I mean, Intel, Ford, T-Mobile, Mondelez, they're smaller. Yeah. Hi, John. You know, none of these companies are market movers anymore. Intel used to be, but hadn't been for almost 20 years now. And Ford probably hasn't been since the 60s or 70s. So, no, they're not going to change the trajectory of the market. And the Fed really has so far at least stuck the landing on their tightening. They really have engineered a softer landing, not a harder landing. But, you know, the market's priced that in. And I think people are starting to wake up, smell the coffee and realize we've come really, really far. And I think we're going to get a little vertigo here in the next three or four months.

All right, Paul, less than a week ago, you called out Align as one to watch, I think, as a triple play. And brace yourself, it's up 13.5% just today. NXP also did well, which is when you called out. Lamb Weston did not. What's catching your eye and what are the themes that you see continuing to emerge this earnings season? Well, so I think, you know, what we highlighted in those reports was in an X line to see if the consumer was pushing back on these premium out of pocket purchases, which aligns earnings suggests that that hasn't been happening. And in Lamb Weston, well, you know, these companies, these consumer food package companies have been pushing through price increases nonstop the last few quarters, expanding margins with little pushback on the part of consumers. Lamb Weston in your conference call noted that the environment for increasing prices going forward may not be as favorable as it has been in the past.

And you see what happened to that stock. So you are starting to see some pushback from consumers. They're not just going to keep paying higher prices for, you know, you can't pay $10 for a bag of French fries, like I was highlighting on Friday, you know, maybe $7 is the limit that people are willing to pay. So that'll be interesting to see in Mondelez's earnings, how they're talking about pricing actions going forward. Are they still able to, do they think, raise prices, you know? Okay. Got to ask you to pause there, George. Intel earnings are out. Christina Parts and Nebulas has the numbers. Christina? So far, a huge beat for Intel. EPS, 13 cents a share. That's non-gap numbers, and that's much higher than the street

was anticipating. They were anticipating a 3 cent loss. We're also seeing revenues of twelve point nine billion dollars, also higher than what the street anticipated. Just one quick line from Pat Gelsinger here. He's saying in the report, our Q2 results exceeded the high end of our guidance as we continue to execute on strategic priorities. So I'll continue to go through this. But so far, the top and bottom line beat stock reacting, reacting six percent higher right now. Yeah. Yeah, that is impressive, Christina. And Morgan, I was just looking through this as Christina was talking. The real big beat here is on client computing. That's the PC group at six point eight billion dollars versus around six point one expected data center. Also better than expected. The street was looking for around 3.76, got 4 billion. But Network and Edge was a little light. Mobile Eye was a little light. Foundry

Services came in better than expected. But that's a really small line at this point. Also, the guide, I mean, $13.4 billion at the midpoint, 12.9 to 13.9. It was 13.2 expected. So, you know, it's turning out the second half so far more like Pat Gelsinger said it would. And I guess that accounts for it being up about 8 percent after hours. He's planted a lot of seeds here with this name. So it almost seems like, as you mentioned, the stock's jumping after hours, maybe starting to sow some of those or reap some of those benefits. The fact that... Yeah, he's been sowing for a long time. Sowing, reaping, yeah.

For a long time. A couple of farming seasons there. Yeah, I know. But I guess, what is the read-through here, do we know yet, in terms of PC stabilization and also the read-through to, like, say, an AMD when you're talking about strength in data center? Let me go to George C. with this. George, there's been some talk that the cloud providers are slowing down their capital spending. There were some worries that that would hit Intel and AMD, maybe particularly AMD,

because they lean a bit more toward cloud and have been gaining share there. But it looks like the overall trend toward things being healthy, the economy in general, and inventories having been run down a bit, at least bottoming out, might be benefiting them here. Sure seems that way. And Intel's been a much-hated stock for a very, very long period of time. So it's kind of past due for it to have its day. So it's clearly outperforming now. And that's a great thing for Intel shareholders and the country because they're doing a lot of cap backs here domestically.

So it's good all the way around. Well, viewers, you probably want to know more about this. So I'll be speaking with Intel CEO Pat Gelsinger after the show, right after the analyst call. You can watch part of that interview tonight, 7 p.m. on last call, but we're going to have more throughout the day tomorrow as well. Looking forward to that. In the meantime, Ford earnings, those are out too. Phil LeBeau has the numbers.

Hi, Phil. Hi, Morgan. This is a beat on the top and the bottom line by Ford. Take a look at shares of Ford. For the second quarter, the company earned 72 cents a share versus the expectation of 55 cents a share with automotive revenue coming in at just over 42.4 billion, well above expectations. There you see the stock moving higher. Then you have free cash flow of 2.9 billion versus 3.6 billion last year. And the overall margin for the company of 8.4 percent last year in the second quarter, they were at 9.3%.

Now the story, the numbers within the numbers that people want, and it's the three divisions, the three primary divisions for Ford. The EV business, that division lost $1.08 billion in the second quarter. It was offset by the internal combustion engine division. that made 2.3 billion, and the pro commercial vehicle division, that made 2.39 billion. So this is the story we've heard before, losing money in EVs as they're ramping up, but more than making up for that when it comes to internal combustion

as well as commercial vehicles. There is new guidance from Ford, raising its guidance for full year 2023 earnings to between 11 and $12 billion versus the previous guidance of between $9 and $11 billion, also raising its free cash flow guidance for the year to a range of $6.5 to $7 billion. Previously, the guidance was for $6 billion. And one last note, the company now expects to hit a production run rate for its electric vehicles of 600,000 this year. I've got to go back and double-check this,

but I believe their previous guidance was that they were going to hit that 600,000 in, or, excuse me, by 24, excuse me, hit 600,000. The previous guidance was that it would not happen until perhaps 26. So that's a couple of reasons why the stock is moving higher, guys. Some generally good news when it comes to EVs and the production rate. Still losing money, obviously. All right, Phil LeBeau, thank you. And shares are up 3% right now in after hours.

Paul Hickey, want to get your reaction to this, especially since we had strong numbers that investors reacted positively to from GM earlier in the week, too. I mean, is this a sector-wide story of of strength right now or is this specific to these companies? Well, I mean, I think the stocks are cheap on a valuation basis. And just in the intro to the show earlier, we were talking about how no one seems to care about Ford or Intel, for that respect. More than half of the analysts covering Ford have it rated as a buy. Less than a quarter of the analysts covering Intel have it rated as a buy. When no one seems to care about stocks anymore,

that's when you should start caring about them and start looking at them. And these stocks you're just seeing, it doesn't take a whole lot of good news to get a positive reaction from an earnings report. All right. We've got more earnings out. T-Mobile as well. Let me run you through those numbers here, too. It looks like EPS, it's it's an earnings beat. A dollar eighty six per share versus the estimates of one sixty nine. A miss on the top line, though. Nineteen point two2 billion in revenue versus estimates of $19.31 billion. Total net ads, though, better than expected, $1.685 million. Postpaid net ads, $1.561 million, also better than expected. The

company is raising full-year net ads guidance to $5.6 to $5.9 million. That was versus prior 5. That's not right. And slightly raising the low end only of core adjusted EBITDA full year outlook. Also seeing in this release lowest postpaid churn, phone churn in the industry for the first time ever and delivering the highest Q2 postpaid phone net ads in eight years. You can see shares are actually negative on this report right now. They're down about one and a half percent. That being said, CEO Mike Sievert will join us in just a few minutes to break down these results in the quarter and talk a little bit about what we're seeing across the industry, which has had a lot of news in recent weeks in general. He's a guy to talk to because they're doing better than the

other carriers. Roku earnings, meanwhile, are out. Julia Boorstin has those numbers. Julia. John, Roku beating expectations across the board. Revenues beating estimates coming in at $847 million versus the $775 million that had been anticipated. And the company reporting a loss of $0.76 per share. That's better than the loss of $1.26 that analysts had expected. Looking at some other key metrics here, active accounts stronger than anticipated at 73.5 million. Streaming hours larger than expected at 25.1 billion. And the third quarter revenue outlook, which I know is really key this quarter, coming in better than expected at $815 million versus the nearly $810 million that analysts had been expecting. Back over to you. All right, Julia, thank you.

Okay, George, want to get your reactions to, or am I supposed to go to Mondelez earnings? Mondelez earnings. See, this is what happens on a busy afternoon like today, the busiest day of earnings. Steve Kovac has the numbers for Mondelez. They just keep coming, Morgan. So look, it's a beat on the top and bottom line for Mondelez. Shares up about or nearly 2% now. Here's what we got on EPS coming in at 76 cents. Street was looking for 69 cents a share adjusted. And on revenue, $8.51 billion versus $8.21 billion expected. Also announcing a 10% dividend increase and adjusting their revenue outlook upwards. They're now expecting 12% revenue growth for the full year, Morgan. That's what we got.

Right. Thank you for that on Mondelēz. And while you're talking, First Solar earnings also out. Pippa Stevens has those. Pippa. John, First Solar shares surging 10% here after a big beat during the second quarter. EPS coming in at 159 per share, ahead of estimates of 96 cents. Revenue at $811 million against forecasts of $721 million.

But the big news here is that First Solar announced its fifth U.S. manufacturing facility. They said they're going to invest up to $1.1 billion in that new site, which has yet to be determined. And President Biden just now releasing a statement on First Solar saying that investments of that nature show that the era of America's ceding leadership to our adversaries and clean energy is over, thanks to my Inflation Reduction Act. So once again, their fifth factory in the U.S. on the heels of that climate bill. Back over to you. This is a little like a concert with lots of guest artists. So it's appropriate. Live Nation earnings are out. Thank you, Pippa. Back to Julia Boorstin. Take the stage with the numbers.

A big beat across the board for Live Nation. Earnings beating estimates coming in at $1.02 per share versus the 63 cents estimated. That that 62% above consensus, the biggest beat since November of 2021. Revenues also coming in much higher than expectations at $5.63 billion versus an estimate of $4.95 billion. Now, this is clearly driven by huge demand for the concert business. The company noting that 117 million tickets were sold for Live Nation shows this year. That's up 20 percent and a 22 percent increase in ticket sales this year. So just to get some stats here, the company's average quarterly revenue figure between 2016 and 2019 was 2.49 billion. So this quarter, more than double that average from the pre-pandemic level.

So certainly a lot of demand for these live events. And we're going to continue to dig through this big trend. Stock is up 2.5%. Back over to you. I think Taylor Swift is having a big impact on some of these numbers. Julia Boorstin, thank you. OK, we're going to go back to our panel now. There's so much to choose from here. But George, there's a theme

that is emerging with some of these names, whether it's Ford, whether it's First Solar, whether it's Intel. And that is the fact that you've seen all of this investment being made by the government that is now starting to show up in a more meaningful way in some of the results from some of these companies. It's a secular tailwind, and it speaks to some of these newer rounds of stimulus that we're seeing, at least here in the U.S. Yeah, that's well said, Morgan. I think that all the big fears about a hard landing were overstated because the Fed and the government pump so much money in the economy, it's just hard to get off that sugar high really quickly. And I did my part for Mondelez. I had six double stuff Oreos last night.

And there's a reason that Verizon and AT&T stock are down in the basement. T-Mobile just has executed so much better than them. And that continues to be the case. And that makes that a really hard space to be in. And, you know, if I was Bill Ford and the Ford family reacting to Ford's earnings and Scott's comments about how nobody cares about that stock in the prior hour, you know, I would slash the dividend to zero and I would use every nickel of free cash flow and buy back the stock.

The market is not respecting that stock. And it's been talked about to no end, the valuation disparity between Tesla and Ford and GM and all the others. But I would get super aggressive if I was the controlling shareholder of Ford. I would either go private or I would buy the stock until the market price uncle and recognizes it's a very fine, well-run company. Okay. Paul, last word here to you. And my question is lead dogs versus underdogs. One of the themes that I'm seeing this afternoon, I mean, Roku outperforming the platform revenue way above what was expected, but maybe the bar was sort of low for them, low bar for Intel as well.

While in social and advertising, we saw Meta and Alphabet way outperform, you know, say Snap. In this case, some stocks that were underestimated seem to be doing better than expected. What message should investors take from that? Yeah, John, I mean, that's the theme you tend to see every earnings season. You know, it's all about where the bar is set and how the stocks react. When you have a low bar, companies have an easy way of exceeding that bar and vice versa. And you get back to low expectations for companies like Ford and Intel, T-Mobile, 90 percent of the analysts covered have buy ratings on the stock. The stock tended to peak out once that analyst buy percentage neared 90%. So once everybody likes the story,

the story has been played out. So I think in that respect, as investors, you don't want to necessarily follow the herd and what's the best going into earnings. You want to look for things where expectations are low. Financials is a sector that's done very well this earnings season. And the bar was set lower for that sector than any other sector in the market. So it just goes to show it's all about expectations. All right. That's why we do the work. Try to figure these things out. Paul, George, thank you. Thank you. And we've got a news alert now on GameStop. Back to Steve Kovach with the details. I never left, John.

Look, another executive shakeup at GameStop, this time announcing their CFO is resigning and will not be replaced by another CFO, but what they're calling a principal accounting officer and principal financial officer. So not a chief level position. This is going to be effective on August 11th. Now, you might remember, John, a few weeks ago, Ryan Cohen kind of cleaned house, firing the former CEO, but not necessarily replacing him with another CEO. So this is effectively executive chairman Ryan Cohen's company now, John. Shares up about four tenths of a percent. Yeah, but that was a CEO who he hired.

So it's kind of hard to clean a house that you messed up. I don't know, Morgan. People going out the door, but questions about who's coming in. I was going to say, I have more questions than we apparently have answers to. In recent history, this is a company when it has reported earnings, has not been so good about not only taking analyst questions, but questions in general. It tends to be very short, very sweet, not a lot of information. I wonder if we're going to get more information around all of these changes. One of the original meme stocks.

Hard to imagine, but yes, but this is one of the original meme stocks, and it is a name that tends to move wildly in both directions. And as we can see right here, it's basically just above the flat line. So it'll be curious to see what the next steps are. In the meantime, though, we have just gotten started. This is a massive hour of earnings, in case you haven't noticed. T-Mobile shares, let's pull those up right now. Last I checked, there you go, under pressure, down about 2%. Up next, the wireless carrier's CEO is going to break down those results,

weigh in on the state of consumer spending. Overtime, back in two. We have an earnings alert on Enphase Energy down big. Pippa Stevens has the details. Pippa? Yeah, John, that stock down 13% now based on weak guidance. But starting here with the company's Q2 numbers, they earned $700 million in revenues short of the estimate of $722 million.

EPS coming in at $147 adjusted ahead of the $125 that was forecast. But once again, it is that guidance. So Enphase sees third quarter revenue between $550 and that was forecast. But once again, it is that guidance. So Enphase sees third quarter revenue between $550 and $600 million. Wall Street was looking for $747 million. So it really does seem to be that guidance that's pressuring the stock. The company said that its U.S. revenue was down 12 percent quarter over quarter due to macroeconomic conditions, though shares down 12 percent. John. All right, Pippa, thank you. Morgan, just to recap where we are here. I mean, that name, smaller name, down big. But Intel is up after a beat on

the top and bottom and sort of a raise versus what the street was expecting for Q3. And we know that Q4 is a really big quarter. That's the holiday quarter. You expect to see some things happen with PCs there. And the whole industry has been dealing with an inventory glut that took a while to work down. You expect from these results that perhaps they have done that. Also, Roku, right, outperforming expectations, their subs higher. So some of these smaller names, reversing the narrative a little bit on what we'd seen earlier in the week, smaller names outperforming expectations. So this isn't Snap versus Meta anymore. It is not Snap versus Meta. I mean, to me, what was so surprising is the fact that Intel shares, even before we got this report

after the bell, were up more than 30 percent year to date. It sort of speaks to maybe this beginning of a recovery or rebound or green shoots for that name specifically, but also the fact that we've seen so much strength in the semi space, at least from a stock performance perspective up to this point and with some of the earnings we've gotten so far. Now, I wonder how much of a difference in story we're going to see play out this earnings season between PCs and phones, right? Handsets have been weak and we see those concerns hanging over everything semiconductor that's not going into a car, right? NXPI focuses on autos did well. Other names that focus on autos as well, you know, Texas Instruments saying their chips that go into cars did well, everything else

did not. Here, at least PCs are bottoming out supply-wise, but what's the demand like? From Mike Sievert, maybe we find out whether smartphones are, at least at the high end, are looking relatively strong. All right. Well, speaking of that, shares of T-Mobile, those are down in after-hours trading after missing on revenue estimates, but total net ads were better than expected. Joining us now on the phone before he hops on the earnings conference call is T-Mobile CEO Mike Sievert. Mike, it's great to have you on with this instant reaction. You continue to take market share this quarter. I guess walk me through that. You said record low churn as well. Walk me through that and whether you can continue to do that as Verizon

and AT&T are aggressively looking to add capacity and aggressively looking to roll out more 5G of their own in the coming years. Hey, Morgan and John, thanks for having me. Well, what investors look for in our market is service revenue growth, not so much on the total revenue line, because service revenues are where all the profits are made. And on that, we not only beat consensus, but beat the whole industry on year-over-year growth again. And, you know, the formula for that is so simple. It's because customers are switching to T-Mobile more, they're staying with T-Mobile more, and they're buying up our rate card with our most popular plan being a premium plan. And boy, that churn number you're asking about, that is historic. First time ever beating the industry, T-Mobile customers being the most loyal in Q2 and the lowest churn ever in our history.

And when we talk a lot about inflation and the fact that consumers have at least, you know, so far been quote- unquote, resilient in the face of it, what are you seeing in terms of some of those spending patterns, even as you do continue to take market share? Well, T-Mobile customers want more of T-Mobile. And so what we're seeing is that our premium plan, our brand-new Go 5G Plus plan launched in the quarter, is already our most popular plan with more than 60 percent of customers choosing it or a similar plan. And so they want more of this network. And there's a reason for it. It's the fastest and most expensive 5G network in the country with more than twice

the performance in terms of speed of our next nearest competitor. Mike, so there's concern in the industry right now that you can sort of grow subs at the rate that people hope, or you can grow ARPU, average revenue per user, but you can't do both. Can you do both? Absolutely. And, you know, you see that in terms of what's happening in the market for us. Overall industry growth moderated this quarter, as people expected it might. And yet, T-Mobile delivered the biggest Q2 in terms of postpaid phone net additions in eight years, amid a moderating market. And we're guiding to stable ARPU, which was actually up sequentially. And so, you know, that's driving top service revenue growth that's the best in the industry.

And it's translating into double-digit and industry-leading EBITDA growth, as well as the best cash flow conversion in the whole industry for the first half. That's, Mike, what I wonder about, the direction of ARPU. Stable, but as we head into Q4, how much kind of discounting do you do, subsidies do you do to get people onto high-end plans? Can you get them on the higher-end plans when so many consumers in so many areas of the economy want to trade down and actually increase ARPU this cycle? Or should investors expect stable and then growth in subs? Yes. In fact, our consumer ARPU is rising. The only reason that we report generally stable ARPU is because we're

just killing it in the business sector, where we're bringing on profitable high CLV ads at a slightly lower revenue per customer. It's a great trade to have. So overall, it's just a healthy, healthy dynamic where customers want more of T-Mobile, and we're stepping up and providing them with what they're looking for. Yeah, more broadly looking at the sector, the lead cables have been a big focus, specifically where AT&T and Verizon are concerned. Investors are very concerned that there's going to be a lot of spending and potential blowback where investigation and maybe removal of some of that legacy old landline infrastructure is concerned. I mean, you don't have that.

You're a newer network. Are analysts right to think that you don't have exposure to this? And if you don't, is this a situation where perhaps it continues to benefit you as you continue to invest in your own network? Well, the premise of the question is spot on. I mean, we're a pure play wireless company, so this isn't our issue. But that being said, you know, I know our competitors are dealing with this and, you know, I'm not an expert on the topic, but you'll have to ask them, you know, what they're facing and whether it's real or not. But to the premise of your question,

yeah, this is just this is just not our issue at T-Mobile. Got it. Mike Sievert, thanks for joining us. You bet. Nice to be here. All right. Still ahead, much more on Intel's earnings beat and what that could mean for upcoming earnings from AMD and NVIDIA. Plus, Carrier showing no signs of cooling off after beating Wall Street's earnings estimates thanks to strong commercial air conditioning sales. The company's CEO breaks down the results in an exclusive interview when Overtime returns. Welcome back.

Check out shares of Carrier finishing today at more than 4%, bringing the heat today. After an initial dip in the pre-market, the company reporting results this morning beating estimates on the top and bottom lines on strong HVAC sales. The stock hitting a 52-week high today, up 36% in just the last three months. Joining us here exclusively, CEO Dave Gitlin. David, it's great to have you on set. Thanks for being here. Thanks for having me. Appreciate it. You also raised your full-year adjusted profit above estimates as well. What is powering the strength? How much of this is commercially based? How much of it is residentially based? It's mostly commercial-based right now. You know, we saw 6% growth overall across the company. We saw 9% growth in HVAC. But within HVAC, we saw 60% growth in our light commercial business and commercial applied was up in the high teens. And it's pretty broad braced.

We're seeing strength in things like data centers, higher education, K through 12. So there's some verticals that are offsetting some of the weakness we see in real estate. So when I hear you mention some of that, for example, K through 12, it makes me think if we were talking about this earlier in the show, but some of the money that's out there from the government towards things like infrastructure, are you a beneficiary? We are. It's very encouraging. K through 12 has always been starved of funding. And you're seeing $190 billion allocated to K through 12, $90 billion of which hasn't been allocated yet. And that really benefits the HVAC industry. What happens with office longer term, right? We've got all these vacancies that are happening.

Eventually, those would have upgraded their systems, I imagine, or certain buildings would have gone LEED compliant, which would have helped you. But now those timelines might get pushed out. How should investors think about how that affects, you know, your, I don't want to say roadmap, but your visibility into future revenues and profits? One of the best leading indicators of office build in the future is the architectural billing index. Usually you start architecture drawing six months in advance of starting construction. And you want that indicator to be north of 50. It's been north of 53 of the last four months. So even though office has been a little bit weak recently, there are some leading indicators that between the ABI index being north

of 50, but also part of the IRA has funding set aside for more sustainability solution for office space. They've essentially doubled the incentive you have to invest in more sustainable solutions. So that should bode well for the future. We're having a hate wave, not just here in the Northeast right now where we're under heat advisory, but we're seeing across many parts of the world right now. You had the U.N. Secretary General just today saying, quote unquote, the era of global warming has ended. The era of global boiling has arrived. Have you seen a direct impact in terms of increased demand as we have had these record temperatures in parts of the world? We have. We're starting to see a nice pickup of movement in our air conditioning business, both residential and

more globally on the commercial side. And I think part of the issue with climate change has been a marketing issue. People talk about this getting to net zero in 2050 to avoid a greater than 1.5 degree issue. I think what you're seeing now is more acute issues globally. You're seeing fires in southern Italy and in Greece. You're seeing fires in Canada. You're seeing water temperatures increase, which could pose the risk of hurricanes. And what that means is you have 17 countries in Europe that have provided incentives to move towards more energy efficient solutions. You have the IRA in the United States. So our focus as a company, and one of the reasons we're doing a major acquisition in Germany, is a clear focus on being the world leader in intelligent

climate energy solutions. And the government incentives, government regulation is driving that shift. Yeah, I mean, you're talking about that $13 billion acquisition of Wiesmann. Something you and I have talked about before in the past is this broader portfolio transformation, whether it is that acquisition, whether it's divesting things like non-core fires, security, refrigeration assets. How are you thinking about that longer term? Oh, it's so exciting. You know, we know that focus helps. When we spun from UTC about three and a half years ago, focus as a pure play helps. We are laser focused on being the global leader in intelligent climate energy solutions. So when we look at, when we speak to our customers,

their number one, two, and three issues when they make a buying decision around heating and cooling, it has to do with sustainability. So we're focused on the energy transition. We're focused on sustainability. And we're buying the premier company in the premier market in the world.

As you mentioned, VisaMint, $13 billion acquisition. Their sales, VisaMint sales in the first half of this year were up 20%. They saw greater than 40% growth in heat pumps. So that residential heating space in Europe is the most exciting space in our industry globally. Is there a time when you turn into a software and service company and you're actually trying to sell less hardware? Because it seems like if temperatures are getting more extreme, ideally people want to use the right building materials, build in the right places, especially when it's data centers. And you sort of have the data to know where it's expensive to have to exist, whether residentially or commercially. John, you're exactly right. I

think we've transitioned from a traditional equipment provider to a digitally enabled lifecycle solution provider because it's all about using data to provide our customers with solutions. So we have a generative AI center of excellence, and there's so much data that comes out of buildings. Buildings produce 40% of global carbon emissions, 40% of that from HVAC systems. So we can use that data to provide real-time analytics to use controls and other devices to provide more energy-efficient solutions for our customers. So we're absolutely transitioning to recurring revenue subscription-based and using data to help drive that.

All right, Dave Gitlin, thanks for joining us here on set. Thank you, Morgan. Thank you. Great to have you. CEO of Carrier. Up next, a top analyst on what he wants to hear from Intel when its earnings call kicks off at the top of the hour, plus what the results could foreshadow for its chip rivals. We'll come right back.

Welcome back to Overtime. Let's get another check on Intel. That stock still spiking more than 6% after beating estimates and giving a guide that beat what was expected. Joining us now, Wedbush Securities Analyst Matt Bryson. Matt, it was data center that a lot of people were worried about, and data center came in at $4 billion versus $3.76 expected. But client computing looks to have been the biggest standout.

Now, does that probably reflect what Gelsinger has been telling us about the work done in inventory and starting to see the benefit from that in the second half? Yeah, I think certainly in Q2, you heard it from the Taiwanese ODMs. You saw it in the market research numbers. PCs got better. I think that helped work down inventory a bit faster. So you got a bit of a demand bump. I think that helped work down inventory a bit faster. So you got a bit of a demand bump. I think the inventory work down does continue to benefit the back half of the year, though I'm also not sure how much more growth you get beyond Q3,

just given where the consumer is at this point. You have a hold rating on the stock. What would you want to see or hear from these results and from the call to change your mind one way or the other? Yeah, so I think a lot of what we need to know about Intel to know whether the story works longer term unfortunately isn't something that we'll see in numbers or we'll hear during this call. Really, the struggle Intel's had over the last four or five years has been around their ability to execute, particularly on the manufacturing side. And so it's really 2024, 2025, when they have those new processors slated to come out on 3 nanometer, on 20A, on 18A? Can they make those manufacturing transitions? Because that really fuels their ability to compete with their CPUs, with their GPUs, kind of across their product portfolio. But Matt, this is a tricky time, right? Because

the stock is already above where people who are being reasonable and saying, let's see if they can make the stock is trading above where they said. And yet now you've got to think, OK, is Intel's team good enough to have a better than average chance of being able to execute this within reason? How cheap is this stock relative to its competitors? And is it worth making that bet? How do you make that calculation, and what are sort of the benchmarks between now and then actually shipping that would make you more certain that they're able to execute? Yes, so where I think you start to get indications are when you start hearing from customers that they're seeing samples of these chips that are coming out next year the year after and that they're they're they're finding that those samples are

good um so particularly on the server side um we learned really early that ice lake was was a struggle um we've known that sapphire rapids uh has been a difficult part for Intel to bring to market like they want to bring to market. So to the question, kind of when do we really start to know? I think we're still maybe at least three, six months away from where we start hearing from partners that, yes, we're starting to see these products and they look good. In terms of can the management team turn around and what's the proper valuation? I mean, you get very different valuations if manufacturing works. So I think they're doing the right things, right? You have to go and invest. That's what prior Intel wasn't doing. That's what hurt their ability to manufacture.

But in terms of what Intel's worth, I mean, if they can get. Yeah, if they can figure it out, it's a bigger number than we have here, for sure. Exactly. I hear you. Probably a much bigger number. This is the turnaround effort of the decade. I've been calling it that for a couple of years. It's still playing out. Matt Bryson, thank you. Speaking of which, do not forget, you can catch part of my interview with Intel CEO Pat Gelsinger. I'm going to conduct that interview in just over an hour and a half tonight, 7 p.m. on Last Call. You hear a bit of that, Morgan. All right. Looking forward to it. This has been a wild hour of earnings. On next,

when we run through some of the other overtime movers that need to be on your radar right now, as you can see right there on your screen, there are quite a number of them. Pretty wild. Welcome back. Boston Beer shares moving higher in overtime. The brewer beating street estimates on both the top and bottom lines while reaffirming its guidance. The CEO citing strong growth in its twisted tea drink that's helping power the quarter, offsetting challenges, ongoing challenges in the hard seltzer segment. Shares are up 11%.

Yeah. Another name moving higher, Coursera, the online course provider, posting revenue and current quarter guidance above analyst estimates. CEO Jeff Maggiore-Mcal up pointing to AI advancements as positive, saying that users are working to keep pace with emerging job opportunities. I'll be speaking with him tomorrow. We'll bring you some of those comments right here in overtime. OK, Roku shares, they were also popping, remember, up 9% reaction from an analyst as we await the company's earnings call when we come right back.

Welcome back to Overtime. Look at Roku shares soared on the back of better than expected earnings up nearly nine percent. For more, let's bring in Jamie Lumley from Third Bridge. Jamie, quite a top line beat here. $874 million versus $773 million expected. That's driven by platform. That beat active accounts $73.5 million versus $72.8 expected. But the stock has now almost doubled since the beginning of the year. Can you buy it here? So there are a couple of really encouraging things to see in these numbers. As you highlighted, seeing that ongoing strong account growth is definitely impressive. And then also just seeing platform sales continue to be strong, considering the challenging ad environment that we're in right now. And then on top of that, seeing device sales

continue to recover. This has been a major challenge for the company, seeing some really volatile results over the last couple of years due to supply chain issues, et cetera. But being able to deliver these results is definitely an encouraging sign. Yeah, on the advertising front, the company noted that the, quote, macro environment continued to create uncertainty with the total U.S. advertising market flat year over year in Q2. Traditional TV declining more than 9 percent, traditional TV ads scattered down more than 17 percent year on year as well. I mean, is that a piece of the market that's going to come back and recover at some point or are these secular declines? It's a good question. And look at this, I think there are a few things to keep in mind. Part is the side of just looking at the ad

environment, continuing to prepare for the recession, which may or may not come. But also there are other things lingering from COVID, such as autos, for example, which have totally changed how they're advertising these markets. What we hear from our experts is that we do seem to be starting to see some encouraging signs in a couple of different verticals. So over the next 12 months, there could be some positive signs in the ad market as a whole and also for visual media. So at today's prices, are investors underestimating Roku, say, versus Netflix, or are they about the same? Can you do some sort of a pair here? What do you do? So comparing the two businesses, there are definitely a couple

differences to highlight. One is, of course, just the already underlying profitability, which is one of Netflix's strongest attributes, particularly in the current environment with a number of linear businesses struggling, such as the Disney's or Warner Brothers discoveries of the world. But for Roku, it's also there's the fact that they are on the path to profitability. They have been delivering on their goal so far of getting to 2024 with some profitable numbers. But also at the same time, it's a completely different scale. And there is still the execution risk when it comes to that. And also looking at how they're necessarily going to fare in their new ventures, such as the smart home products, and then also the original content,

where compared with some of the other large players out there, they have smaller pockets. All right. Jamie Lumley of Third Bridge, thanks for joining us. Shares are up 9% right now. Up next, the countdown to earnings calls from Intel, Ford, Mondelez, and Roku, plus some of the other big stocks that are making big moves following their quarterly results. Stay with us. Big stock moves in aerospace and defense again today. Defense Prime Northrop Grumman reporting a beat and a raise as the backlog there grew. CFO Dave Kaffer telling me the 9% year-over-year sales growth highlights the, quote, strong demand that the weapons maker is seeing both domestically and internationally. All four of the sectors grew, and he noted that they show, quote,

improvements in supply chain deliveries and continued success in hiring and retaining talent. This is something Northrop and really the entire sector overall has struggled with in recent years and talked about. So space, especially strong again, 17 percent sales growth, which Keffer notes is also the approximate compounded growth of that segment over the past five years. It's driven by big programs like Sentinel, which is the ICBM replacement, and NGI, which is tied to homeland missile defense. But it was space, according to at least some analysts, that also caused the sell-off post earnings today as well, specifically margin cut. That was what was in focus. On the call as well, CEO Kathy Worden disclosing that Northrop will not compete as a prime contractor for the U.S. Air Force's sixth generation fighter jet. This is the highly secretive NGAD program,

meaning Lockheed Martin and Boeing are now likely to go head to head on that competition. But it wasn't just Northrop that was under pressure today either. L3 Harris, those shares dropped six percent despite a beat and a raise that we talked about in this hour yesterday. Also, Honeywell, which had a beat on earnings and raised the lower end of full year guidance. Honeywell CEO Vimal Kapoor telling me on CNBC earlier today that aerospace has been and will continue to be very strong, John, in that particular report to the tune of double digit percentage growth in aerospace sales last quarter. The one almost lone exception to all of this was actually Textron. We saw a big earnings beat and a raise to full-year EPS guidance there, and that stock shot higher by about 12%.

But overall, as one analyst put it to me, it's this idea that you see a soft economic landing and that narrative seizing the market more broadly. Defense tends to be defensive, so perhaps we're seeing just some knee jerk selling across the board in general right now. So space up 17 percent, but margins down. Why is that? Well, I think there's a margin cut expected over the rest of this year, but it kind of. OK, it kind of. Well, I think it speaks to some of these supply chains normalizing increases in investment and the like. But but, yeah, overall, pretty strong report from Northrop Grumman and really does speak to some of what we've been seeing in general here so far this earnings season with this particular sector.

Also on the earnings front, don't miss an exclusive interview with Norfolk Southern CEO Alan Shaw. That is tomorrow following the railroad operators weaker than expected second quarter profit and revenue that was reported earlier today. They took another charge. Before we go, queue up the QR code, sign up at the link, cnbc.com slash OTOH. It's the latest installment of my On the Other Hand newsletter. This week's debate, it was this morning on Squawk, is Elon Musk's move to rebrand Twitter to X a masterpiece or a mistake? Go ahead, sign there at the code CNBC.com slash OTOH. All right, that's going to do it for us here at Overtime. Fast Money starts now.