>> welcome to "lunch money." i am adam johnson. a big news for you. warren buffet, and the cubbies. in motors, a heavy-duty quarter. higher-priced pickups. they take away the sting of the 7 million recalls. it is not just gm today. we have 64 companies in the s&p 500 all reporting today. we will give you the rundown. properties, though the in empire. we will give you a view of the

empire state building that you have never seen before, trust me. first, we are kicking it off with what everyone is talking about. two big headlines in tech. we will start with the world's biggest company. >> apple reporting a huge quarter, its best ever. second quarter revenue was more than $45 billion, up by one percent, profit up seven percent, and 43.7 million iphones were sold in the quarter, a new record. the company boosted a share buyback program. >> i do not know where to begin. investors and analysts have been griping about apple's growing business. carl icahn would not shut up about the company giving buyback to investors. here it is delivering on both fronts. >> there was a lot in the report

tonight. there is a lot on allocation side about dividends we were not expecting. the phone number was most impressive. that is the core of their business. they use that as the tip of the spear to get their whole ecosystem out. that number was substantially better than what the street was thinking. the growth rate of the emerging markets, that is what stood out. lastly, the ipad number was a disappointment. >> exactly. it cannot all be sunshine and roses. the ipod sales dropped 50%, the steepest on record. they accounted for 19% of sales. >> it has been a challenge. >> apple has shown it can sell iphones and china and other markets. it is making boatloads of cash. there is one more piece of the apple pie.

>> we have not seen new product categories. we have been waiting for new innovations that have not come from apple. we continue that from what we hear from people hiring away employees. >> the post steve jobs apple has plenty of work ahead. right now is go time. >> is a question of what the comedy can do between the month of -- the month of june and november. what do we see in the fall with the iphone six. what is the wearable we all believe is coming at go -- coming? it is largely under owned across the investor base. >> investors are buying shares, rising the most in two ears.

apple is not the only tech stock making headlines. >> facebook reported first-quarter profit and revenue that blue plastic -- blew past analyst estimates. >> facebook is blowing past the estimates in the latest quarter. it is curious. on the conference call yesterday, executives said the spending will increase for the rest of the year and the initiatives like the photo sharing application instagram and video advertising, not necessarily going to contribute to revenue. remember facebook is huge. >> here is a big number that shocked me. facebook has 1.3 billion monthly active users. we kind of forget how massive facebook is. there are a lot of large numbers. even as it leaves mobile concerns in the dust, it cannot keep growing at this rate. >> at this rate, maybe not, but

they have other tools at their disposal. instagram has 200 million active users. it is often said facebook is losing a little bit of its cachet among american teenagers, but they are going to instagram instead, which it also owns. but instagram is taking over for twitter in many respects. >> facebook is adding another tool to its jampacked toolbox. it has bought a mobile fitness app "moves" that lets people gather data from smartphones to determine whether users are walking, running, or doing other physical activities. facebook has not said how much it actually paid for moves. gm is on the move as well, even

with all the recalls. we will hear from the cfo coming up next in motors. later on property, the empire state building as you have never seen it before. the owner will give us a private tour. volcanoes are getting active. three in peru have been spewing lava ash gas. residents have been evacuated. ♪

>> this is "lunch money" on bloomberg television. we are also streaming everywhere. i am adam johnson.

in today passes investor, we have got one of the world's is greatest, warren buffett. every year, the chairman auction offs a lunch for the foundation. we caught up to him. the first topic, coca-cola. berkshire hathaway owns 9.1%. shareholders improve a controversial executive compensation program. it pays coke manages shares of the company. buffett abstain from voting, even though he is against it. >> i voted enthusiastically for the directors and i am certainly enthusiastic. being the ceo, i do not think you can have a better one. i thought the plan was excessive in that it talked about 500 million shares and using them up over for four years. my view is that it was excessive. i could never vote against coca-cola. i could not vote for the plan either.

it is just the way i feel about the people there. >> one of his disciples is david winter, also against the plan. winters wanted buffett to be more vocal in fighting it and here's why he was not. >> i was not interested in taking up that campaign. i do not disagree with him and doing it. you've been a shareholder a long time, he, like me, feels it is an excessive plan. i would not have waged a campaign against him. i was not going to work on his behalf to age one. >> he said he thought there was a conflict because you have criticized other companies that have rewarded employees with stock options. you are not vocal about it here in coca-cola. >> i have not named companies. i have written about compensation generally comment

sensibly, over 30 or so years. i never said i was against options, absolutely, but here, i just thought, and i voted for coca-cola plants in the past, but i thought it was excessive here. >> this brings us to activist investing. a lot of it is happening now. good or bad? >> i do not see anything wrong with speaking out about a company's plan. i think he is a long-term shareholder of coca-cola and he has a big addition in it and he did not like the plan and decided to go public with that fact. it is perfectly proper to do it. i would not do it myself, but i do not see anything wrong with doing that. >> next, concerns of a tech double. investors like david einhorn say the tech will pop and 1 -- buffett says he will not go to silicon valley. >> it is not remotely like the

mobile that existed 15 years ago or whatever it was. we are not seeing total craziness or anything of the sort, but we are certainly seeing some companies go public at high valuations and private transactions. but i do not know those companies well. it is not just something you can go out with any piece of junk and call it.com and sell it at a huge price. we are not there. but i do not find myself tempted to buy anything coming out. >> and then there is housing. mr. buffett has been optimistic about housing and still is and thinks government should play a role. >> in the 30 year, fixed-rate mortgages is good for the american public area you will need public dissipation in some way to bring the cost down. i think the american public will do way better with some kind of

guaranteed instrument in the picture. i think that will be in the picture. whether you start an entirely new company and let freddie and fannie run often have a new company that in turn has government guarantee, perhaps with riot the dissipation, and i know they're are talking about having the private market set the price to some degree, but have the government have -- be the insurer of some resort, maybe the private sector would take some percent of the risk. >> do you think they have aided in the company? >> no, freddie and fannie's stock rallying, i do not think it has got anything to do with the housing recovery. i think housing recovery was built into low level of housing starts following the crash in 2008 for a couple of years. household formation eventually just demands housing. >> all right.

it is earnings season. a roundup coming up in company. in motors, bmw taking on tesla with the new hybrid ford's car. we will take it for a little test drive. before we go to break, ronald mcdonald is getting a makeover for social media. it says it's famous spokes clown will take an active role in social media for the first time using #ronaldmcdonald. here is the before and here is the after. do you see much of a difference? nor could we. ♪

>> this is lunch money on bloomberg television, also streaming live on every device imaginable. we are going global, from trucks in america to electric cars in china. first, the truck. estimates in the latest quarter, thanks to higher prices for pickup trucks, that made up for the cost of recalling 7 million vehicles. our resident car guy, matt miller and cfo chuck stephens. >> earnings were up $5 million year-over-year with margins just under eight percent. growth in china, earnings were up just over nine percent year-over-year. continued improvement in europe. when we look at our expectations and performance in q1, really broad-based improvement across the business. >> one of the things we saw a miss on was revenue. it was not as high as analysts were looking for. they were looking at about 37 points, $9 billion.

why is that? are you taking higher margins and focusing on higher margins at the cost of topline growth? >> there were a couple of impasse. we had $8 million of foreign exchange impact revenue based on some of the weakening current seas, russia and south america and other emergency -- emerging markets. as we indicated in january for our consolidated international operations, we're in the process of transitioning key products, especially in the middle east. that impacted revenue as well. in our core markets, north america and europe, we are happy with our revenue and overall performance in the market. question is betting big in the market with plans to invest 12 million -- $12 billion in three years. that will increase capacity by 65%. gm is not the only automaker

looking to grow in china. elon musk hand delivered keys to buyers of his new model s. the billionaire founder says sales in china could top sales in the u.s. by even next year. >> we see pretty strong demand right now. probably more demand than we could fulfill this year. long-term, we will have hundreds of service centers in china. my instructions to the team in china are to try to build those as soon as possible. we are going to bill them at a rapid rate. >> admittedly, it has not been in entirely warm welcome. >> i am really disappointed. >> ok, sorry. >> the woman claimed to be a buyer of the 120,000 model s. she was upset with delivery delays from factories in california and is not the only one.

>> we have delayed some of the deliveries in china, just for a few months, in order to ensure that when they get their car, they will have a great experience. some were a bit upset about that. i met with them and they apologize. it is not as though we want them to be unhappy. our motivation is coming very much from a place of wanting them to be happy and not unhappy. >> yes. the happy. people want their cars. tesla has competition on this front. bmw is rolling out its hybrid and doing it in china. stephen engle had an opportunity to take it for a spin. >> this is the test version of bmw's hybrid i-8 sports car but is not quite ready for the press. she needs a bath first. ♪

>> where are the girls? ♪ now, she is ready for my road test. >> the engine has not kicked in yet. electric engine is driving. you can switch to the all caps version by moving it into sport. look at this now. it is already, telling us we are burning gas. then, there we go. that is the hybrid engine kicking in. it obviously has a head start in the china market compared to tesla, whether that gives germans in the bmw i-8 an advantage over the mile as has yet to be seen. let's check out the hybrid i-8 from bmw.

this is the electric test vehicle. not really the production commercial model just yet. look at this. carbon fiber body, so it is fairly light. in the front is the electric engine and this is the charging station. now, we can see fairly straightforward, just plug and play. is something to be considered in beijing because we do not have these in high-rise owings. -- buildings. you will have to have a long extension cord up to your 30th floor apartment. the good thing is it is a hybrid. electric engine in the front and a twin turbo three cylinder peppy engine in the back. a petrol engine that will get you, they say, 0-60 in 4.5 seconds. >> it is a sports car. when you put it into his hero a mission mode, you can drive 35 kilometers or so.

as soon as the battery starts to run down, the engine will automatically start to recharge it and, of course, give you a lot of additional power. >> it may be environmentally friendly but not too economically family. we want to show both sides of the story. ♪ welcome to the china market. if we are indeed in a bubble here, you will likely have some competition at opposite ends of the electrified spectrum. bloomberg, beijing. >> the price is right with a top speed of under 35 miles an hour. it is not quite as much fun to drive as a bmw or a tesla. we have talked gm, apple, and facebook. we have earnings as well as well as dozens for you.

a wild card advice for handling success from shaquille o'neal. ♪

>> this is "lunch money." today's moving picture where the video is the story. under scrutiny for chemical weapons. activists and residents are reporting the government is using chlorine gas for months. security council members are calling for an investigation. assad's government denies the allegations. president obama was fêted. the promise that the u.s. would protect the east china sea

islands. a yankees pitcher has been suspended. he was thrown from wednesday's game against boston after an official spotted a substance glistening under the stadium lights. he said he had trouble gripping the ball and did not want to hit anyone. how noble. in company, we have an earnings bonanza. it is 13% of the index. they are all out of the numbers today, caterpillar, 3m, amazon, verizon, dunkin' donuts thomas shall i go on? let's just start with cat. >> earnings beat analyst estimates. caterpillar also boosted its four-year forecast. a great indication of the global economy, especially in the emerging markets. >> the stock market does well.

the cat led the dow in trading. then there was ups. carol massar lays out the numbers for us. >> what everybody is focusing on, the company laid out is forecast for the year. in january, they're saying it should be at the low end of the forecast here there is disappointment, coming on the heels of fedex. we saw that last month. mixed results from the company, instruct -- strong in terms of international. daily volume up about eight percent. scott davis specifically sang him a call it was due to unusually harsh weather. about half of their service days were disrupted because of what is going on with the weather. i talked to ups during the quarter. those folks are staying at their office, definitely a big factor. job up about 20%.

>> the weather is not as much of a problem for southwest airlines. posted record fourth-quarter profits, topping analyst estimates. here is the ceo gary kelly. here's how he did it. >> we will do our best. virtually flat fuel prices for the past 12 months. that bodes very well for us going forward. that has been the main challenge we have had, especially over the past 10 or 15 years, rising energy costs and as the transportation company, if energy prices are moderate, we will try real hard. >> you have to get more revenue out of each cap -- each passenger you fly.

>> it was an all-time record low factor, 79%. one of the opportunities for us is to fill empty seats and then also, with products so that customers have the choice to purchase. we are growing our revenues without having to depend on significant fare increases. >> from the skies to skyscrapers, we will take you inside the empire state building for a tour that money cannot buy. that is coming up in property. and how to succeed like shaq. the 7'1" former basketball player is making more money now than he did on the court. we will tell you how. ♪

>> this is "lunch money." we are streaming virtually everywhere. i am adam johnson. today in property, we are in an empire state of mind. the empire state building grace the new york city skyline since 193131. a lot of years and a lot of money made it what it is today. the empire state realty trust manages the building. the art deco spires served as a

beacon. its technology supports a major radio stations. more than 4 million people marvel at the view from its 80 64. if you are famous, you can brave the climb to the secret birds nest. on a clear day, you can see over 80 miles. it spans five different states. the empire is also one of the world's largest office buildings stop it is also worth so much money. raised 929at owns it million dollars in an ipo. it is the second biggest for a u.s. real estate trust. the empire state realty trust manages the building. here is the company ceo. >> the empire state going has

always been the icon on the new york city skyline. back in 2006, we took over the program and the inside was not so good. we do a lot of work in the empire state rebuilding program to make the outside image reflect the inside so when we brought people in, it was not just the view, which was impressive, but the entire building. >> it is one of the world posses most famous skyscrapers. the empire state building is a staple of the new york city skyline. and a building in transition. a ceo has plowed a half billion dollars into energy improvement. loaded up the state-of-the-art enhancement all to make this a high-tech hub for companies like a clothing distributor. >> i said, if you will not come in at least look, i will not give you another square foot of many of my buildings. they came and looked and felt

love. >> they are your largest tenant here? >> our largest throughout the portfolio. we have cody, linkedin, -- >> it is what most people never see that is transforming this new york city landmark. >> limited all the insulation as far as the energy efficiency, all the elevators, what we realized is we do not have to do all those things. original, 1931 steam station. we are at the wind tunnel.

tell me what this is about. >> we need to bring fresh air into the building. it comes into the building from the third floor, works its way under the building, and supplies fresh air to a couple underground levels and the stores that have lower levels in the buildings. >> above the wind tunnel, construction is underway for a white tablecloth restaurant and a 14,500 square-foot gym exclusively for tenants. >> we have got free weights across the wall, stretching here. the concept here is your typical employee that has an hour for lunch. 45 minutes at the gym, 50 minutes to grab food and get back to the desk area we will now go to the 103rd floor, actually the ip treatment. >> tell me what the life has been like after the ipo. >> is wonderful. life is more simple.

the biggest lesson learned was that you could take on anything anyone else would tell you is nearly impossible, and if you plan, you have patience and stamina. i feel i have probably gotten 80 e-mails on my blackberry since we have been walking around and i need to get to them. >> you can watch the full interview with tony and our full coverage inside the empire state building. let's go to bloomberg.com or our award-winning tablet app. coming up, remember the russia today anchor who resigned on air. her advice for what to expect if you are thinking about quitting your job in a big and public way as she did. by the way, how about some advice for handling sets?

we are talking about pro basketball legend shaquille o'neal. here is one more for you. michael phelps, the most decorated olympian of all time is hungry for more. the olympic medalists retired at the ripe age of 27 after the olympics in 2012. 20 months later, he is coming back. 100 meter butterfly at the grand prix today. his first race will be fun and games. ♪

>> this is "lunch money" on bloomberg television. we are live on almost every device imaginable. the secret of success. when she quit her job at russia today, this was during a law that -- a live broadcast.

what can you expect when you quit your job in a public way the way she did? >> 3, 2, 1. my name is liz wahl. i am a journalist. i gained some notoriety. i cannot be part of a network funded by the government that whitewashes the actions of. -- of food and -- vladimir putin. i am proud to be an american and believe in disseminating the truth. that is why after this newscast, i am resigning. >> if you witness this wrongdoing, that is when you should stand up. i did it on the air very publicly. i have no regrets here at i'm proud of what i said and what i did. i would not recommend may be causing that much of a stir. i do not think it is applicable

to all people. in most normal circumstances, if you have a better opportunity, you quit. quitting is like a breakup. sometimes, it is easier than others. sometimes, it is more civil than others. sometimes, it is a more passionate breakup. i think when you make that decision, you have got to remember you made that decision for a reason. you've got to move on. >> moving on and in some cases moving up. shaquille o'neal making more money now than when he was playing basketball. he spent the day with a seven foot, one foot businessman to get his insight. we call this "shaqonomics." >> 40, 45, that is the only revenue i need. i will always have monetary ambitions. ♪

you cannot mess with perfection, but you can moisturize it. i am 41-year-old and i have tried almost every product in america. if i am not familiar with the product, i do not believe in the product, i will not endorse it. i started in arizona in college. for $.99, you can get a lot of liquor. we made a deal with arizona. it was a no-brainer. we're off to a macy's appearance. an affordable line. big guys, we only have a couple of places to go. i want to be able to go in there and buy something off the rack. ♪ this is every day. every time i go to the mall.

♪ you have got to have the shaq pack, baby. you have to hire people smarter than you. the greatest leaders are the ones smart enough to hire people smarter than them. ♪ >> they're great. >> i love frosted flakes but the only call i am getting is wheaties but i never really ate wheaties. when you have money, a lot of people say, "hey, invest in this box.

this box right here will be the next big box. you give me $1 million, i'll give you $10 million." do your due diligence. you have to say, ok, are boxes still in or are we going green now? a lot of guys just look at the monetary action and it messes them up. i cannot just tell a guy, invest. always tell a guy to stay in school and get an education. >> you can read more about shaq's empire in the latest issue of "bloomberg businessweek." japan is showing off robotics success to president obama. >> good job. >> robot. it is a pleasure to meet you. ♪

which means bloomberg television is on the markets. i am julie hyman.

now for u.s. stocks, let's go around the world. we are further afield. the emerging markets suffered its longest since january. it might keep going. that would include mainland chinese equity in its global indexes. there is investor reaction to the proposal will people are up in arms over this. >> you have fidelity saying that it is crazy. you have mobius templeton saying that it makes no sense. as long as these capital controls exist in china, investors will not be able to fully take advantage of these equities. they will have to be underweight. they will not be able to take advantage if there is a rally.

>> they want to be able to play separately from the emerging markets as a whole? >> if you are allowed to access them. there is capital control. that means that you cannot own the shares. have licenses from regulatory agencies. even then, you must have a quota. if you cannot cap this, there is no point in having this index. >> why are they doing this? there seems to be so much resistance. >> he would be able to tap a greater number of companies. there are almost 3000 that trade in the mainland indexes versus 140 in china. it would bring about $12 billion. it would bring that to these indexes. mobius says that this is a little bit of detail winding the dog.

it will prompt, further opening up their markets. china a little bit. it is an interesting perspective. it thinks that the resorts are worth getting some pushback? >> they are serving lots of people. it is up in the air. they will talk to 3000 different investors and make an organization. we will see how it comes out. people can invest in chinese equities through hong kong. they will be able to buy one very large chinese empathy in the u.s. when alibaba has an ipo. there are other ways to go about it stop >> thank you so much. thank you for talking to us about emerging markets. to talk about a couple of the other elements that we are watching after the close, we got amazon earnings out after the close of trading. those earnings came in ahead of estimates. target numbers were ahead of estimates.

microsoft, depending on what metric you look at, baby estimates. just as we saw, it one of the earnings news is driving market today. we will continue to see that tomorrow. we will keep watching that nasdaq. for on the markets, i'm julie hyman.