tv Mad Money CNBC April 29, 2013 11:00pm-12:01am EDT
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 cremerica. other people want to make friends. i want to make you a little money. my job is not just to entertain you but teach and coach. call me, 1-800-743-cnbc. do you want know how difficult this earnings period is for the largest companies? you want to know why the earnings season has stunned us
and confused us and driven us crazy? given the strength of the averages, including today, with the dow roared 106 points, the s&p gained .72% to a 52 week high. nasdaq climbed to a 12 1/2 year high. how can this be? it makes no sense. right? well, i'll tell you. i'll tell you why it makes no sense. even as we're hitting these highs, just about every major company in this country has reported a sad and disappointing quarter. i'm not kidding. i worked on this all weekend. i could not believe when i sat down with all the quarters, i mean, listen, you can't make this up. listen to this amazing compilation of horrendous earnings reports. think about who has disappointed this earnings season. it's shocking. first obviously there's apple. with a quarter that's now regarded as the benchmark of bad quarters. precipitated the most downgrades in price target cuts of any
company this year. apple lost $250 billion in market cap from the top is such a visible defeat for the reporting period i would call it a microcosm of the moment. except $250 billion isn't a micro anything. it's nice to see the stock bounce back since the report. that quarter truly was a hard one to like despite management's attempts to tell you how impressive it was and you were wrong to be negative. passed the torch of top market capitalization back to exxonmobil. and how did the colossal exxonmobil do? delivered a discouraging declining quarter, too much to buybacks, not enough to dividend and certainly not enough defining oil has brought a dimming to the oil and gas portion of the earnings. leave it to the largest company to report the worst quarter in the oil patch. and then there's ibm. the bellwether tech company, the dow jones averages. with a hugely disheartening report that drove the stock down 22%s. 10%. couple days time.
the culprit? declining growth throughout the quarter. a sad message for the multinational tech names. it was a whopping surprise for those of us who admired ibm's consistency under former ceo for so many years. got whacked by this one, my charitable trust. it's been bouncing but nowhere near where it was before it reported. how many amazon? is there a more important retailer out there, save maybe walmart? i don't think so. amazon's report struck people as sorely wanting and the stock got pummeled for almost 20 smackers. i personally like the report and expanding gross margins but i don't matter. the decline tells the tale. fell 35 5 bucks. haunt one of my absolute favorites? 3m. cornerstone industrial out there which reported a heavily disliked quarter and gave you a forecast cut that sent shudders down the spines of investors who are used to this company's consistent earnings growth. b dinged for that nasty
slow growth quarter total bow wow chateau name now. then there's at&t. the largest phone company. which gave you a quarter that sent the stock down. the hardest that i can ever recall for that one. at least in a day. there was a vicious decline for the $200 billion behemouth and the contrary made you feel like there's no real growth at all. the shocking decline in wire line is a testament to this country's inability to create new business. are you listening, mr. bernanke? the first thing a new small business has to do is hook up a landline. there must not have been a lot of new businesses because there was not a lot of phone lines hooked up. it was head and shoulders above the quarter procter & gamble put on that pulverized this stock 82 82-76.
procter $200 billion capitalization company. plarn that quarter showed the company, considered among the most defensive out there, could not withstand the woes of the world's economy. how bad are two biggest semiconductor companies, intel and qualcomm? we understood intel was going to miss. i mean, it's too linked to personal computers. they are in secular decline, right? but qualcomm? qualcomm is the anointed one. ♪ hallelujah mr. 4g. it's supposed to be perfect. yet it's the biggest disappointment in tech other than apple. i still can't get my arms around why. two more $100 billion companies that quite frank lly blew the quarter. did you see the reaction? i should say the visceral reaction to ge's quarter? it quickly fell from 23 to 21. believe it or not. the company's earnings growth decelerated as the quarter went on. europe weakened badly. ge is the most high profile earnings miss on the industrials. it's another $200 billion company let us down. the ample dividend, the fact
it's likely to get a boost does make me say the stock is worth sticking with and my charitable trust which you can follow along on actionownersplus.com is buying -- well, bought some after the break. it still stung, believe me. united technology is another stinger. another charitable trust name. it finally seems to be stabilizing after another, after a quarter -- i've never seen these guys miss, it's been ages but it felt right with europe and sequestration called out for reaso reasons. europe can bottom. sequestration, the damage might have been done already. its consistency is so legendary it took my breath away when the stock got hammered. the largest health maintenance operation in the country, dow jones component united health, they missed hugely. reminded us there's still plenty of risk to a health care play that's supposed to be winning under the new regime. oops. how about the banks? nobody cared for the numbers from bank of america, jp morgan
or wells fargo. the three largest financials. worries about net margins and slowing mortgages knocked back all of these stocks. come on, these are the big three. bank of america's numbers, once again, couldn't be fathomed. it sure seems more like a law firm at times than a bank. it's got so many lawsuits against it. at least their quarters weren't viewed as light as the two largest independent security brokers. goldman sachs and morgan stanley. which still haven't regained much of their footing and became two of the most disliked stocks in the market. at least when it comes to their book value versus share prices. did anyone, did anyone slash their forecast more visibly than caterpillar? talked about missed earnings. the largest manufacturer in the dow failed to deliver on multiple counts even as the stock seemed to reflect those woes already. heck, two of the largest food purveyors in the world mcdonald's and starbucks reported to me what looked like
terrific numbers. when you dove underneath the hood, some looked weakness. weak numbers around the globe for mcdonald's. gross margin issue in china that reversed starbucks in after-hours trading. they were both laided disappointing. starbucks posted a 7% domestic same-store sales growth. both stocks are coming back now. i think that's right. but there's no denying that the quarters were panned. so now we have them all. let's go over this. what did happen? what happened to the averages after disappointle, disappointment, disappointment, disappointment? what happened after apple, exon, ibm, amazon, 3g, atm tnd, united health, jp morgan, bank of america, morgan stanley, goldman sachs, caterpillar, mcdonald's and starbucks disappointed? how about all-time highs for the
dow. you see, this is what's truly amazing about this market. if you didn't know any better, you think we'd be down massively from the highs because of all those disappointments. you would most surely have shorted or bet against the s&p and the dow. just looking at the multiple staggering disappointments of the largest companies on earth. but there are just too many other companies. some large, some domestic. smaller companies, some drug companies, some retailers that are just taking up the slack. i think this is amazing. the biggest most important most visible companies have done quite poorly, yet the market has not skipped a beat. i would never believe this. that explains the absurdity of why this is such a hated market. even as it keeps knocking on the door of the all-time high list. it explains to me how the lack of viable alternatives to stocks, especially the low interest rates from bonds that have been mandated by the fed, will keep stocks high. maybe until the underlying companies return to their old winning ways. and if you wait, for example, for revenue growth, you will
have missed the opportunities to buy before what could be a definitive second half reacceleration. if what i suspect is happening, a bottoming in china and reversal and a bottoming in europe actually comes to pass. so here's the bottom line. to me there's only one way to look at this. if this market can go higher without those companies, and what a list, right? without those companies doing well, what happens if they stop disappointing? hmm. maybe that's what the market is trying to say. because if you shorted it on the basis of any or all those huge companies' quarters, you are losing, not making money. oh, and in the end, making money is all that matters. let's go to mike in missouri, please. mike? >> caller: boo-yah, jim. my book, you're the champion of the small investor. question is, what are your thoughts on the financing for jcpenney through goldman sachs? plus soros taking a stock ownership in the company? >> all right. i'm retail buy by background.
they got the money so they'll be able to maintain their inventory. they will still get their inventory, their goods for christmas. what will happen is if they have a good holiday season, they'll do well. and if they have a bad holiday season, they could still run out of money. i think what matters are earnings, sir, not financing. i don't see the earnings, but it's good to have the financing. it buys them time to get it right. the. the biggest companies in the world disappoint? and market still goes higher? hmm. maybe things are going to get better, not worse. "mad money" will be right back. coming up, chemical attraction? ppg is up nearly 10% since reporting. as it pushes into new industries, can it continue to give your portfolio a protective coating? cramer paints you a picture. an exclusive with its ceo, next. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter.
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there's more to this market than the simple dichotomy between defensive domestic stocks and dangerous international ones. the truth is, some stocks are working even if they do a lot of business overseas. they just need to be well managed, and be in a line of business that's proprietary, not commodity. meaning their stuff can't easily be copied by the competition. consider ppg. yeah, the pittsburgh based chemical company makes coatings for cars, planes, buildings, glasses, you name it. ppg used to been an old-fashioned chemical company. in recent years the company has been selling off or shutting down the commodities side with the sales of its remaining commodity chemicals business to georgia gulf.
ppg gets three quarters of its sale from the coating business. this is a company that refuses to be held hostage to the broader macro environment. ppg took its face inte into itss a long time ago. no surprise at all when ppg reported a week and a half ago they beat the numbers despite the hand wringing about europe and china. in response, the stock rocketed from 132 to 140 single day. didn't stop there. continues to rally. now trading $147 a point and a half from its high. even with this move, ppg is only up about 8.6% for the year. i think the stock could have plenty of room to run. don't take it from me, though. let's take a closer look with chuck bunch, terrific chairman and ceo of ppg, learn more about the quarter and where his company is headed. mr. bunch, welcome back to "mad money." >> jim, it's great to be back. >> all right, chuck, you basically just said, look, we're going to have to do this without a lot of growth around the world. and you really said, listen, it's broadly weaker activity in
europe and china. there's some growth resuming in asia. it's not a pretty picture out there, is it? >> it's really a mixed picture, globally. you mentioned the weakness in europe. it's been pretty rough over there, but if you focus on your business, and we've emphasized productivity, restructuring, and really getting our costs right. if you do those things, you can do well even if these tough markets. >> all right. let's go over this acquisition you made that's not getting enough talk about which is this axo, the paint business. you put out a number there of what you can save that was far more aggressive than anybody felt. walk us through how you can very quickly take out those costs like that. >> well, we feel that that acquisition of axo's northern americ agricultural coating business which includes brands in the u.s. and canada that you would know as glidden, liquid nails,
dulux. we're getting some day one cost synergies from the akzo acquisition. lower pension costs, lower allocations from akso corporate, but we have some real synergies with our existing architectural coating business, you know as pittsburgh paints, olympic paints and stains. we have great synergies in terms of our supply chain, our operations, and so we're very comfortable that we can get good synergies out of this business, position it well, as this residential and eventually this commercial construction market here in north america recovers. >> we've been big fans of sherwin williams. i did not know, this gives you more of a national footprint than you had before this. >> yes. we've been especially in our company-owned stores business, we have been a relatively
regional player in the u.s. market. now with this akzo acquisition, we'll pick up a number one position in canada, and we'll pick up an additional 300 company-owned stores here in the u.s. so we'll get much more of a national footprint rather than just being a regional player here in this market, jim. >> with the changes in your commodity business, and the offloading, you have $900 million in cash. you've got -- you've got nonrecurring gain of $2.2 billion. you've already taken in 7% of the stock outstanding. what is the right thing to do with the rest of the cash that you have? >> well, we're going to take a balanced approach to our cash deployment as we always have. we just bumped the dividend 2 cents a share here last week with our earnings announcement here. and we think that the capital spending, especially with our specialty chemical or coatings portfolio is relatively modest.
so right now, we have, we think, an opportunity to continue to drive on acquisitions, both here in north america and globally, in our coatings and adjacent markets. and also continue to do share buybacks. but obviously we think we want to continue to supplement the portfolio with these acquisit n acquisitions. you've seen a couple of them recently. not only akzo architectural coatings, but an industrial player at the end of 2012, and we just announced an acquisition of a bolton in our aerospace coating business depth which should really play nicely with our product array supporting commercial and military aviation. >> right, that's how the coatings business can be strong though people think there's not that much construction going on. i want to quote you from the call, because this was pretty optimistic. you said, "we feel that the
business will get betting overall in europe." you mentioned the first quarter is weak, you think the comparables are going to get favorable in the second half. you're the only person i have talked to in business who actually thinks europe could be, say, bottoming or could bottom. you see something in your numbers that gives us faith and hope about that? >> well, jim, i would say that the first quarter was exceptionally weak in europe, and we think that in the second half of the year, we're going to see a stabilization at these weaker levels. we're not looking for improvement in europe in terms of significant growth until 2014. but we don't think that the first quarter will be duplicated either in the second quarter, we think that the growth declines will be moderated. second half of the year, moderation. but no real growth until next
year. i'm not totally pessimistic about 2013, as we saw, as bad as we saw the first quarter. >> unlike a lot of other execs, you are actually bullish about china but it's because you do autos and autos are very strong in china despite what we see about aggregate number, right? >> the chinese economy is still going to grow 7.5% or so this year. that's very solid. the automotive markets both the oem and aftermarkets are very strong. and you look at 2013, we're expecting about 10% growth in the automotive builds in china. so already the largest automotive market in the world. so if you look at 10% growth with number one position that we have, we've got some great new product introductions. there's some new assembly plants that are going up that we're well positioned for. we're very optimistic about the
chinese automotive market and it's a domestic market. almost all of these vehicles are for the domestic market. they're not being exported. so i think this is another story on what i would call the growing consumer and domestic demand in china and certainly automotive is one of the strongest end use markets in china. but overall it is still a little choppy over there, but automotive is excellent. >> chuck, you're in the right markets. domestic housing, in autos, you're in aerospace. that's why you can be able to pull it off with tremendous execution and great costs coming down. chuck bunch, chairman and ceo of ppg industries. thank you for coming on the show. >> thank you, jim. >> stocks not up enough. given the quarter and what's going to happen the rest of the year. not up enough. you heard china good. europe bottoming. you take europe bottoming and see big leverage from the cost takeout here at ppg. stay with cramer. coming up, shocking the
street. industrial giant eaton was on the rise today after reporting. can growth in its electrical business help lead the charge higher? or will it run out of juice? cramer's earnings exclusive with its ceo is just ahead. ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ge has wired their medical hardware
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getting hurt by europe and who isn't, there's more to the earnings puzzle than mere geography. you know what matters? execution. at the end of the day we like companies that have great management, run by people with long track records. electrical control, management systems, hydraulic truck transmissions and aerospace. i like eaton so much i own it in my charitable trust. it bought cooper industries in a $13 billion deal that gave the company a lot more exposure to the electrical side of the business and more domestic exposure. you might think eaton would be acting like a dog here because it's an industrial and industrials have had a rough time lately. they beat the estimate. some say it came in a little light. i don't care. they rose 34.1% year over year and eaton reiterated its
guidance for the rest of the year at the midpoint of the forecast. expect their company to grow at an 8% clip this year, the best in the industry, in a challenging environment. imagine how well eaton can do when the global economy gets better. the stock jumped $1.63 in response to the earnings. oh, and while you wait, they're paying you a nice 2.75% yield. pretty darn good for an industrial. let's check in with sandy kru d cutler, chairman and ceo of the company. mr. cutler, welcome back to "mad money.." >> good evening, jim, great to be back with you tonight. >> ythis is an amazing quarter, you say even in the call europe is molasses, the economy over there is so slow, you saw some good asia, united states okay, yet you were still able to deliver remarkable margins. should we be focused more on margins than revenue if we want to figure out what a stock is going to do these days? >> obviously you have to have
the revenues. the real key is where you led off tonight, in this relatively slow growth outlook around the world, 2% gdp, the companies that can execute, they can create their own sources of additional sales, their own sources of additional profit. that's really where we think the opportunity is for the shareholder and what we were able to do in the first quarter. you correctly thonoted, profits 28%. we exceeded our own guidance for the quarter as well as the analyst consensus. we're off to a really solid start in a year where markets aren't going to bail people out. it's execution that's the key to 2013. >> i like to measure the execution one way by looking at margin expectations. you have margin expectations, 2013, electrical products, 16%. electrical systems and services 14%. hydraulics 13.5%. these are remarkable numbers. how are you going to be able to pull these off in this environment? >> well, again, a couple steps. you may recall on our fourth quarter, jim, we took there a$5 million in restructuring. we watched the world economy
slow down during 2012. we decided particularly in europe we needed to work there to streamline our operations. we got that tone done. that plus all thework we're going to integrate as you mentioned our $13 billion acquisition of cooper. those are areas where we can make a difference in terms of productivity and efficiency and new products we bring to customers to solve power management problems. that's how we think you manage through these kinds of periods of slower growth. >> you bring up a good point. the analysts didn't talk about it. i told stephanie link, my parter in for action alerts. what are you capable of doing now that you have cooper that you couldn't to before? there wasn't a lot of overlap. there was a lot of expansion. you took a big part of this market. you must be able to create new products with these two companies together. >> absolutely. electrical becomes 60% of our total revenues. you saw the strong performance you mentioned from the two segles we reported our
electrical business in. this morning on our call i referenced a couple products that are allowing us to outgrow market, a lighting show here in the united states just held last week. you saw us introduce a cutting edge new technology, we're using an edge-lit technology to l.e.d. lighting, biggest trend and hang in lighting to recessed lighting, an area that's traditionally been the home of the fluorescent light bulb. what we've just done in terms of taking our high-power energy efficient power quality equipment, moving that into the mid-range for the smaller data centers and small business. machine build irs around the wo today trying to find -- what we've done with automation which brings together technologies is a value raeter for customers. three examples of the product technology that allows us to outgrow our end markets. >> we're believers in a long term aerospace cycle. when you broke down in the
conference call the electrical systems and services someone was trying to say, isn't that a lot of government? you said it's a lot of aerospace which we think is in major bull market mode. is that the way you look at it? >> the question this morning really was about where was our government business really centered. and as you know, we do in our aerospace business both commercial and military aircraft. what was sort of surprising about our bookings which were up very solidly, up 7% in the quarter in aerospace, we saw a strength on the oem side on both the commercial and the military side because of the fact we think we're on those right platforms on military. so a really strong quarter in aerospace. what we were particularly excited about in our aerospace business for this quarter you saw the 14% margins. up very solidly from where we were last year and right on what our guidance is for the full year this year. >> okay. how about commercial construction? it didn't really play that big a role i think in -- i know if that came back, it would be huge
for you guys. >> yeah, i would call it a mediocre quarter if you will. we think the combination of both the government-driven construction and the private put in place is somewhere in that sort of 3% to 4% growth market. i think some would say a really great market is when you're in the high single digits. we can do very well on this kind of market. we're continuing to see broad-based activity. there are a couple of verticals that are quite active still as you can imagine. areas like oil and gas. very, very business city. office has actually been quite good. if i switch over to the residential side for a minute, the multifamily side is an area where there's been a lot of action in addition to the single family. i would say we're pretty happy with the conditions here in the u.s. on the construction side. >> go back to the aerospace for a second. i know boeing, the dreamliner is going to be rolled out. tremendous amount. we know away from -- we know alcoa told us business jets are very strong. we know airbus is doing incredibly well. how much of the aerospace cycle
are you involved in? so our viewers understand -- they understand the eaton box in their home, they understand the commercial. they're trying to figure out where you play in aerospace. >> virtually across the board, whether you're thinking about the wide body or narrow bodies on the commercial side, whether you're thinking regional jets, commercial or military rotor craft, the helicopters. whether you're thinking of the fighters and the transports. we play across that board. we are benefiting exactly as you mentioned from this mini boom on the commercial side of the aerospace marketplace and the defense side where we've been public saying we think that market is going to shrink 6% this year. we're on those important programs like joint strike fighter and new air force tanker program, an awful lot of the heavy lift helicopters that allow us to be on the right programs albeit in the shrinking side of the business. >> a great quarter. thank you so much for coming on. i did not expect this quarter to be add good as it did. the first has always been tough for you guys. this one is remarkable.
>> it's always our weak quarter of the year. when we gave our guidance for the second quarter we pointed out our seasonal volume picks up 5% to 10%. we're expecting a 7.5% increase in our second quarter. that allows our profit profile for the year to be 46% first half, 54%, for doable this year. >> that's terrific especially in this environment. sandy cutler, chairman and ceo of eaton. >> thank, jim, always good to talk with you. >> execution. that's what matters. eaton has it. that's why the stock went up and why other stocks didn't go up. stick with eaton. stay with cramer. we're here! we're going to the park! [ gina ] oh hey, dan! i really like your new jetta! and you want to buy one like mine because it's so safe, right? yeah... yeah... i know what you've heard -- iihs top safety pick for $159 a month -- but, i wish it was more dangerous,
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>> announcer: lightning round is sponsored by td ameritrade. >> it is time. it is time for the lightning round. you say the name of the stock. >> buy, buy, buy. >> sell, sell, sell. >> play this sound and the lightning round is over. are you ready, skee-daddy? lee in california. lee? >> caller: >> thank you for all the hard work you do for us. >> i'm sure trying. what's up? >> caller: my stock is samstrom
gold and where you see it going. >> these companies that help fund other development of gold and we have backed away from all gold stocks. and we now just like gold coins even more than the gld. that's just my feeling. one guy. that's how i feel. let's go to scott in new jersey. scott? >> caller: jim, how are you doing? >> all right, partner. local man. what's up? >> caller: you're intelligent and a genius. >> thank you. >> caller: beautiful guy. what about agrium? >> not my favorite. i like potash a little more. i like the ag group. i'm not jumping up and down about it because the price of crops is not going up a lot. miguel in georgia. miguel? >> caller: boo-yah, jim. >> boo-yah. >> caller: i to know about sun power. >> actually i think -- the hine these have pulled back. the chinese have pulled back from solar. i did think the quarter was excellent. i kept waiting for it to pull
back. it never did. jake in louisiana. >> caller: jake, how you doing, buddy? thank you for pulling back the smoke and mirrors for the small inve investor. >> thank you. >> caller: you recommended a year ago life technologies. i got behind it. it's been in the news a couple weeks ago. it's kind of flat now. i know you say investing doesn't mean holding on to the stock forever. is it time to ring the register or hang on as more upside? >> no, i think you actually got -- i think you got all the gain you're going to get there. >> sell, sell, sell. >> we had the ceo on, one of the examples why you got to watch the ceos, we were blown away by how good that company's technology is. and that ladies and gentlemen is the conclusion of the lightning round. >> announcer: the lightning round is sponsored by td ameritrade. coming up, best medicine? you ask. >> caller: my stock is cubist pharmaceuticals. >> i wish they'd come on air. >> and cramer answers.
tonight he's going straight to the source to see if this company's pipeline could prove profitable. don't miss his one-on-one with cubist pharmaceutical's ceo. oldm two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. oh, boy. [ groans ] ♪ ♪
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we spent a lot of time talking about biotech stocks that could become major players in the drug business many years down the line in part because these are the companies get it right. their stocks work regardless of what happens in the broader economy which we know is not that great. seven weeks ago valerie in pennsylvania called about another relatively smaller bio pharma play. cubist pharmaceutical. actually called it just a drug company. cpst. i told her i had to do more homework. because this is the most interactive show on television, not only am i going to answer valerie's question but we're going to talk to the ceo. let me give you the background. hubist, the company, is a real business with real products on the market right now. real profits.
the main drug, cubison is an antibiotic used in hospital for infections resistant to more traditional treatments and this drug could do $1 billion in sales this year. that qualifies for blockbuster status. cubison makes up 20% of the sales. it goes generic in 2018. it has a pipeline, including three drugs in phase three clinical trials. likely to get important data, sometime this year. at least two of the drug candidates also have blockbuster potential. meaning they could generate over $1 billion in peak sales. cubist has a risk with a patent cliff but a pipeline that could be rewarding. intriguing situation. we need to do more work. which is why i'm thrilled to have michael bonney, ceo of cubist pharma to tell us about his company. mr. bonney, welcome to "mad money." have a seat. >> thank you so much. >> we're trying to obviously get our arms around cubist. and you clearly have one of the biggest drugs out there, but the other drugs i guess you could
say are pretty much on the come right now. >> they are. we're in the last stage of clinical testing before we submit to the regulatory authorities for three different products. two antibiotic, one nonantibiotic. as you said, we're very bullish about two of them. the third one we think is a large unmet medical need and fits beautifully into our commercial infrastructure. a lot of leverage. >> that's the urinary tract infection and the associated diarrhea indications? or the opioid induced constipation? >> urinary tract and intraabdominal infections. that we think has really significant potential. u.s. and europe combined we think that's at least $1 billion if the phase three is a positive, we get register. >> back up for a second. i don't want to get too granular, instantly. our viewers are probably wonderi wondering, talk about hospital infections. >> yep. >> now fortunately i hope people don't have to go to hospitals. >> me, too. >> i don't think people realize hospitals are incubators of infection. that's where you play the role. >> that's exactly right.
in 2007, as an example, 1.7 million americans got hospital-acquired infections. >> didn't have them before they -- >> didn't have them before they get in. 100,000 patients died of hospital-acquired infections. the big problem is that because there are so many variable patients avery inpatients, it's a hot bed for resistance. when you see in the press all these articles about superbugs. >> right. >> most of the time, not always, but most of the time those superbugs show up in hospitals first. our focus is really can we get new antibiotics in so we can keep patients healthy when they're in the hospital? >> okay. now cubison, itself, had some of the analysts were saying to me it had numbers that were below expectations in the first quarter but it was because flu season. now my first reaction would be, now wait a second, what could be more -- i don't want to use this term to be glib but better than
cubist than flu season? >> cubison is a unique antibiotic, it doesn't work in community-acquired pneumonipneu. >> catch it from one to the other. >> there's a chemical property of the drug that doesn't make it effective if that circumstance. when the hospitals are full of patients with flu many of whom develop pneumonia, cubicin is not a -- >> i know we should be able to say whether it's back on track then. here we are, flu season is definitely over. are numbers back on track? >> well certainly we reported a couple weeks ago q 1. we'll report q 2 in july. i think it's safe to say we didn't change our guidance. >> right. >> we had within the range of what we thought was a pretty good first quarter. independent of what the consensus was. and we're very comfortable this year we'll deliver in the u.s. between 900 million and 925 million of cubicin revenue.
>> may 7th meeting where we'll hear about a new drug. we have a hearing, you're in a dog fight with a major pharmaceutical company. i expect to hear something pretty much any day, right? this could come down. >> yeah, so what happened was we got notification little over a year ago that hospira filed a challenge with the fda to our patents. what happens in that circumstance is, we sue them to assert our patents. that's a very structured process. the first sort of public part of that process is what's called a markman hearing. that was held on april 10th. what the markman hearing is it's in front of the judge, in this case in the delaware courts and two sides come forward with the key terms and the patents at issue here. >> okay. >> and their independent definitions of what those terms should mean. in this case it was a couple terms. both sides brief the judge then argue the point. there are two perspectives on these. what the judge said was within 30 days give or take he thought
he would be able to deliver a -- >> let's say someone listens to you today and buy the stock and this comes down. is it the end of the world if you lose given the -- >> not in the markman hearing. the process now will continue, and we have a trial scheduled in front of the judge in february of 2014. >> oh, okay, now i have the schedule. >> and then in we go to trial, and who knows, but if we go to trial, after that, then the judge will rule on whether the patents are valid or not. remember, we have five patents in this fight. >> right. >> only one of them has to be sustained in order for us to continue to have hospira off the market. >> one last thing. you do have a conference. the aua meeting, san diego, may 7th. that is when we should be expecting the big data point, right? >> well, we're going to be providing new data on one of our other drugs at that meeting. >> okay. >> that drug is called intereg, used to help patients who have had bowel surgery get out of the
hospital quicker. the new data presented many that meeting, patients who had radical sesectomy. those patients have a very hard time getting their bowels working again post-surgically. the data presented there is how does our drug help them get out of the hospital quicker? >> we want to stay tuned to this. i think getting out of the hospital is integral to the country system of trying to bring down health care. obviously saving lives, too. that's mike bonney, ceo of cubist pharmaceuticals. if you want to know more, obviously a lot of good data points this year. stay with cramer. look at them kids. [ sigh ]
they have no idea what it was like before u-verse high speed internet. yeah, you couldn't just stream movies to a device like that. one time, i had to wait half a day to watch a movie. you watched movies?! i was lucky if i could watch a show. show?! man, i was happy to see a sneezing panda clip! trevor, have you eaten today? you sound a little grumpy. [ laughter ] [ male announcer ] connect all your wi-fi-enabled devices with u-verse high speed internet. rethink possible.
people keep getting me wrong on netflix. i've been adamant microsoft or apple should buy netflix. i think it would be a great idea, but i'm not saying it's likely to happen. in fact, i'm sure that neither microsoft nor apple is the least bit interested in doing so. i'm also sure that reid hastings, ceo of netflix, isn't a seller. so what's the point of saying it then? because it really should happen. and just because i'm a journalist and not an investment banker doesn't mean i'm not allowed to suggest a good merger idea when it comes to it. netflix currently has 30 million subscribers in the u.s., alone,
could have 90 million subscribers worldwide soon. over time. he points out netflix has 9 million more subscribers than the largest cable company. why does that matter so much? first, we thought apple would unveil a real robust i-tv product soon. i think what's holding it up is the cable companies won't play, don't want to give up the name. i'm thinking apple must be saying to itself, bypass the cable companies entirely by just buying netflix? in the meantime, microsoft has a new xbox coming out next month. you can watch netflix on your xbox. if microsoft integrated it into the e videvice, it would be electric. the entertainment device business into a much bigger piece of the pie. reduce windows reliance. two things gall me about the criticism of my thinking here occurring with no respite, @jimcramer on twitter. the first is people somehow think i have no right to say this kind of thing without
knowing it's happening. how dumb is that? why can't i propose an idea? hey, i worked at goldman sachs. there i can talk about it. the second criticism is i say buying netflix would help their stocks. it's almost as if people are saying that doesn't matter. what matters is the deal will be good for business to which i say, come on. give me a little credit here. the only reason i'm saying it will be good for their stocks is because it will be good for business. apple needs something, omg, they don't have it, at least in 2013. ne netflix could give it to them. both companies have the cash to pay for this for the most part. both companies haven't done anything special with the cash. microsoft paid for skype. free service. hard to monetize. they could spend $15 billion for netflix and refinance netflix's balance sheet and negotiate fabulous deals with the makers of entertainment or make it themselves. apple could own the entire living room if they bought netflix. the cable company.
so forgive me for trying to suggest something that would boost the value of either potential. trust me, this is precisely what investment bankers do every day. and just because i have a darn tv show opportunity mean i got to check my brain at the door. stick with cramer. morning, brian! love your passat! um. listen, gary. i bought the last one. nice try. says right here you can get one for $199 a month. you can't believe the lame-stream media, gary. they're all gone. maybe i'll get one. [ male announcer ] now everyone's going to want one. you can't have the same car as me, gary! i'm gettin' one. nope! [ male announcer ] volkswagen springtoberfest is here and there's no better time to get a passat. that's the power of german engineering. right now lease one of four volkswagen models for under $200 a month. visit vwdealer.com today.
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stay connected to cramer on madmoney.cnbc.com. >> sally smith delivers. there's always a bull market somewhere and i promise to find it for you right here at "mad money." i'm jim cramer. and i will see you tomorrow. it is both legal and lethal. seven pounds of metal and plastic that fire a bullet at roughly 3,000 feet per second. it's called the ar-15. to some, it is a brilliant piece of engineering, a modern sporting rifle, and a symbol of one of america's most basic freedoms. >> thank god for america. >> thank the lord. >> for others, the ar-15 is an obscenity, an assault weapon with nju
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