♪ sometimes i feel like i have to get away ♪ >> good morning, everybody. welcome to "squawk box" here on cnbc on the best day of the year. i'm becky quick along with joe kernen. andrew is off this week. it is bring your kids to workday. we have all of them right here in the house with us. we'll start this morning. hi, guys, the little squawkers are here. >> we did a few reads with the teleprompter. watching that i did discombobulated. >> it's harder if you're holding a mike. doing it live is hard. they did well. >> we'll see some of them. >> 7 and 8. plus we have a lot to talk about. this is the best day of the year. everybody is happy when the kids come in. we'll start this morning with apple, the company making a big splash after the bell. here are some of the highlights from that report. first of all, this is what really caught people's attention, apple announcing a 7 for 1 stock split. it's als approved another $30

billion in buy backs. the company also approved quarterly dividend of 8%, nearly $3.29 a share. analysts were looking for about 38 million phones to have been sold. apple earning $11.62 a share and that blew expectations out of the water there, too. more than a dollar above estimates. revenue came in at 45. $6 billion. that was more than $2 billion above expectations. here's what carl icahn tweeted out after apple's report. >> agree completely with apple's increased buyback. believe we'll be happy within we see new products. as we said at conference yesterday, we continue to believe apple remains meaningfully undervalued. many analysts fail to understand the company. well, investors really took a second look at this, jumping on apple shares, soaring more than $40 in the late trading, gain of

7.5%. we haven aanalyst coming up in a few minutes. one of the tweets that was really great yesterday was like 11 weeks and 6 days of doubting apple in the quarter and one day of believing and jumping back in. >> getting back to the mid-fives. it's been in the sevens. we had the discussion to get back on the fast track to a trillion dollar market cap. my question was, do they need -- >> new products? >> do they need new products or because they only are still in the teens for penetration of smartphone. >> can they continue to sell and bring the market share up? >> yesterday it wasn't new products and it wasn't ipads. it was the iphone. the iphone can still give you 40 bucs. i don't know if it can get you to a trillion. that's why icahn, i like what you did, can't wait to see the new products, tim. that was a pointed remark.

actually less pointed than normal. >> than he normally is. >> that's exactly what he's saying, great quarter. you did great with the iphones but what have you done for me lately? >> some of the -- increasing the dividend like that, splitting 7 for 1 so that other investors can get in because that stock was pricey. you can get -- >> i don't know if i'd do that. >> the split? i kind of like it because i understand, if you're an investor who wants to dabble in stocks, you're not going to be buying a lot of stocks at $564. >> there's a certain -- >> berkshire never split. >> there's a certain cache in berkshire and google. then you can figure out, you know what, i'm going to mack a couple classes, i'm going to give those people the opportunity, with nonvoting stock. >> that's what berkshire has done, too. >> right. it's always better, i think, to split the stock.

when you do a reverse split it goes down, when you do a reverse split, it goes up. it just looks cheaper. we'll see what happens. >> what's wrong? facebook are the other big report investors are reacting to this morning. the social media giant earning 34 cents a share, a dime ahead of estimates. revenue also beating expectations, thanks to facebook's mobile advertising business. facebook did say video ads and ads within its instagram photo sharing app would not make a meaningful contribution yet to revenue in 2014. the company also announcing that chief financial officer david ebersman will be stepping down june 1st. he'll be replaced by david winter. >> he was also -- you heard of him. >> he was from zynga, a cfo

there. >> i like the name of zynga. that's what facebook did, up $3. i don't know what the market cap is of that. i'm surprised apple -- we'll get back to that -- we add 8% on to that. it's almost 2.5%. it's gone up today. >> that will bring the yield down. >> right. >> let's talk about earnings we're expecting. today is a huge day for results. we've got eli lilly, caterpillar, 3m and general motors, all expected to report just over the next 90 minutes. buckle up, people. today will be capped off by microsoft and amazon after the bell. and we'll get first on cnbc reactions and comments from eli lilly's cfo. that's at 7:00 a.m. eastern. we have gm cfo chuck stevens, happening around 7:50 a.m. and at 8:00 a.m., caterpillar ceo.

he's also forthright about the global economy, too. a lot to talk about with all of these folks today. alstom, one of the big movers today. there are reports, they came out yesterday, that general electric is in talks to buy the company for about $13 billion. and that a deal could be announced as early as next week. that was out yesterday. i haven't looked in all the papers this morning but wasn't it bloomberg -- >> it was bloomberg. >> ge's declining to comment on the report. and alstom says it was not informed of any takeover offers. can you say that? i was not informed of any -- i don't know. the stock -- >> you're saying that sounds like legalese? >> where there's smoke there's usually fire. it makes sense because ge is unable to bring back $80 billion

in repatriation. this will be 13. they have 87 in cash, 57 over there. out of this country. >> alstom shares have been -- good right. >> down 20% or something. >> i still say we, even though we're not owned by general electric anymore. >> i understand. >> move into more of transportation. we already -- there i go again. ge makes locomotive engines and are involved in jet engines, things like that. they've gone away from ge capital and finance. kind of makes sense. alstom shares had dipped about 20% over the past year. it was a cheaper buy. that's up 14%. we will see. if ge were to pull off such a deal, it would be the biggest acquisition in the company's history. now i don't know if that's adjusted for inflation but this was the first dow component, at

least the last original dow component. it's thomas edison. this would be the biggest acquisition ever. it would be a big deal. are the animal spirits back? you can't buy yogurt from that country. >> right. >> and also you have politicians and unions in france where the company employs 18,000. can you imagine -- i don't know whether ge would go in and rationalize, is that what we call it, rationalize operations but it could mean -- >> i don't think you can. >> you're not allowed in the first place. would the french -- and i use that not as a pejorative, would the french -- the word itself. no. i love france. favorite city in the world. if you can't buy a yogurt company, you'd be able to buy this? this is a jewel of french industry in manufacturing. >> i think that would raise more than a few brows. >> these euros, they know the

bullet trains. everybody travels around in trains. we tried to bring them here and connect cities that don't even want to visit each other. bullet trains in europe -- >> they're the thing, the way to get around. >> you don't have to take off. >> oh, fly. >> i think the nauseous is from the nervous. >> no. it's a motion thing. >> you're strapped in. >> it's a motion thing. trust me. >> let's talk more about general electric. janing us -- joining us now is nick heymann from blair and company. long-time follower of general electric. where there's smoke, there's fire, ge, are they considering buying this company? >> good morning, joe. excuse my voice. i would tell you in november of 2010 ge was critically interested in the grid portion

of alstom, which at the time aviva owned. in turn, it was alstom that beat out ge for all of the utility power management products that now are a part of alstom. >> that is interesting. so you weren't surprised -- you can't say. you don't know whether there's actually something going on or not. >> there's a lot of puts and takes here. okay? clearly, they have a significant overlap in their gas and steam turbine business. we added it up last night. the two collectively are utilizing about 40% of their combined heavy gas steam turbine capacity. ge is one of the top two wind producers. alstom's entry into the business is probably not strategic. as you mentioned, ge has focused

on the freight side with these locomotives and alstom has been one of the three leaders in the passenger rail side across all spectrums of the market. so the transit rail business has consistently grown moderately but grown strong free cash. >> at 13 billion, this could be -- >> 13 billion, joe, i think we have to check the numbers under the hood. okay? because 13 billion might be the 25% premium i've seen referenced to yesterday's equity price for alstom. that would equate to if you paid something in the 32.50 range, that's euro, it would equate to about 9.9 billion in euro just for the equity. there's 4.5 billion euro of gross debt, 500 billion in capitalized lease. wrap it all up, it's about 1 .6 billion euro which in dollars

would be about 18 billion. >> assume something of that debt. they got a lot of money over there. >> there's a lot of -- i think there's a lot of opportunity here, but, you know, i think it's certainly affordable by ge. i think the strategic fit could be rationalized. but i think clearly to ensure the required returns, remember, alstom for almost the better part of seven or eight years now has earned 7% or 8% margins. you'd have to have an extensive restructuring agreement with regard to alstom's existing cost base. as you mentioned, today 19% of its employees are located in france, 18,000. >> you think the french would let ge buy? >> here's another tweak. 2 8% of alstom is owned by bouygues. the stock was down 68% from its

all-time of 76 euro back in 2008. he suffered for quite a while. he apparently supports this transaction. >> really? that's interesting. wish we had more time, nick. a lot of stuff in tech and elsewhere going on. appreciate it. >> okay, sir, have a great day, joe. >> have a hot toddy. i think that has booze in it. it's 5:00 somewhere. shareholders approving management's equity compensation plan at coca-cola yesterday. warren buffett is coke's largest shareholder, holding about 9.1% of the shares outstanding through berkshire hathaway. he told me he abstained from that vote because he didn't agree with the management's equity plan. he hadn't said anything before that. he does say the plan to increase the number of shares it awards

managers he thinks is excessive. he didn't want to vote against it or say anything ahead of time because he didn't want to express any disapproval of management. he says he still loves coca-cola. he reiterated his support for coca-cola ceo mukhtar kent. >> in 2002 coke had a plan that involved 240 million shares. that lasted six years. they had a plan in 2008, six years later, that was 280 million shares. that lasted six years. and then this plan when i read about it was for 500 million shares, which they would equate to 340 million, still, 340 or 500, they were going to use it, they said, in four years. that really struck me as quite excessi excessive. so i didn't actually read that until after winters wrote the letter. i would have felt the same way. >> here's a statement from coca-cola on buffett's comments. the coca-cola company board

respects mr. buffett's philosophical stance on ek we-- equity-based compensation. we greatly respect his views and look forward to continuing our productive relationship with him for many years to come. buffett said he's never sold a share of coke, never plans to sell a share of coca-cola. still has a lot of faith in the management, loves mukhtar kent. he has been outspoken about excessive compensation in the past. he said to him this felt excessive. >> i'm all over the map on this, as far as nuances go, i thought a lot about this, too. i think we're both right. i knew he wasn't going to go against coke on this. >> i didn't think of the -- >> i'm not going to say chicken -- a word i can't say. if he feels that way, vote your shares. to be able to talk the talk and comment on it without doing it, the only way -- if you want to

prevent the public secretarier from getting involved in excessive compensation fwb that's what you view, it has to be shareholders who take the initiative on this. if he doesn't stand up to take the initiative on something that he thinks was wrong, then i don't know who will do it. >> i think sometimes a rebuke like this is potentially enough. >> i think so, too. >> my guess is mukhtar kent and the board got the vote they wanted but they can choose how many years to use that. originally they would sbend pen in four years. i asked him if they took longer to spend that, would you be happy? he said yes. >> you can get more with sugar than you can -- it may be just his to speaker suede in -- persuade in a softer way. >> he doesn't do hostile

takeovers. he likes the management here. he think kent is the best person to be running this company. >> i love warren, you know that. he's a piece of work. he was the most incredible businessman in his generation which doesn't mean you're always that nice all the time. okay? now he's a nice old guy, he has a lot of money and everything. the way that people immediately will accept the world's richest man, assuming the role of the protector of the little guy and the protector of the working class and the guy against excessive compensation, the guy against rich people getting a tax break, no one ever sees that with even a hint of cynicism or with skepticism. i just think, here he is, he can set himself up, i wish i paid a lot more taxes. but he doesn't pay taxes. he talks the talk but he never really -- >> there were people who complained about that yesterday. first of all, it caught me by surprise. i was trying to figure out how

to react. >> what? say that again. did you say that? just say that again. >> i was a little -- i will say, if somebody like that doesn't speak out, i haven't heard from david winters. he put out a statement right before. all that coca-cola said was that 83% of the shares cast were cast in favor. i assumed that meant buffett voted in favor. so did winters. he said we're surprised he had an opportunity to stay a stand on failed to seize it. the more i thought about it last night, the more i thought he can be more persuasive by doing things this way rather than going hostile. >> he says when the tide comes down, every's naked. >> when the tide comes you can see who's naked. >> this time, it's belching when you're invited to a dinner, you do it too many times you're

eating alone. >> you're eating in the kitchen, he said. >> he thinks long and hard about everything -- i don't think he thinks long. i think he can think so quickly about things. a lot of things struck me. big news coming out of apple. joining us now, dan morgan, senior portfolio manager at cenovus trust company. what struck me here was the company may not be ready to take over the living room and it may not be ready to buy tesla and may not be ready to have flying cars yet. but all those things hold a lot of promise but in the meantime they have to do some -- it looks like they're rearranging the -- not the deck chairs on the "titanic" but rearranging finances to give shareholders right now because they don't have a new product yet. >> you're right, joe, i heard you talking before about apple, saying can they extend the current portfolio and drive growth that way or are the new

products like the iwatch, going to make up for the slowing and the products. they seem to be taking a bit from ibm in terms of reducing the share count year to year was 65 million. they reduced the number of shares, really jacked up that earnings per share on 7% net profit growth. so you know, increase the dividend, repurchase shares and so forth. overall it looked like a decent quarter as you were talking about throughout when the numbers came out. you're right. the jury is still out. are these new products going to actually be able to make up for these more mature products that are starting to slow down in terms of volume? >> in the meantime, i mean, tim is like how about this? i'll give you this and what about this? >> right. >> how about i throw in this? you have $40 of upside. it worked.

>> yes. >> everybody loves a split. >> that's huge. >> i like 2 for 1 split. ge split 3 for 1. i never got a 7 for 1. >> i think there have only been three or four larger ones. >> reverse splits from 30 cents. >> if you're a bank you do reverse splits. i'd rub 7 all over my body. you don't need to see that. 7 for 1, it's like, whoo! suddenly it's pretty great. for a tech stock, a growth stock, i'd have to question close to a 2.5% yield. how much are you growing? >> microsoft, intel, they're all doing that now, cisco, paying big dividend yields. if you look at the top line growth on amle what was apple, little over 4%. they're trying to move things around. it's like a drug company, joe, if you think about it. you have these big drug companies with the huge

blockbuster drugs coming off patent. they have to come up with new products to account for that. you think about it, you have the four key products. you have the iwatch, i-tv. it's a big question. >> you're on a treadmill and somebody is turning up the speed. just to stay in place you're running faster and faster. >> there you go. >> appreciate it, dan. thank you. >> okay. when we return, a special bring your kids to work edition of executive edge. we go to the front lines of a very hot topic, which is cooler, facebook or apple? we'll ask the kids of america which ones they use. they have answers for us, right after this. [ dog barks ] ♪ [ male announcer ] imagine the cars we drive... being able to see so clearly... to respond so intelligently and so quickly, they can help protect us from a world of unseen danger.

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♪ ♪ teach the children well ♪ the father's health did slowly go by ♪ it is time now for the executive edge. which do you think is cooler, facebook or apple? we just happen to have a panel experts here to tell this out today. we have scott, kimmy, natalie, blake, who are all around the table. joe, you have to admit, these are the experts when it comes to cool, not us. >> they are. i think we might have the same answers, because kids -- how old do you have to be to be on facebook? >> i think 13 unless you have

permission from your parents. is that how it works? are any of you on facebook. >> instagram. >> he whereas talking about facebook. it's bad for you to be on facebook if you're younger. you are not the customers. you are the users. >> that's right. i saw that. i saw that. >> if you had to pick. >> i have my phone right here. >> i have my iphone. >> kimmy and natalie. >> ipads and ipod touches. >> yes. kimmy? i mean natalie? >> i'm ipod touch and ipad. >> all around the table. >> i use an ipad for school and i have my iphone in my pocket. i don't know what i'd do without apple, although unfortunately sometimes i do instagram in

school also. >> if you got to own a piece of the business. that's what a stock is. you get to own a piece of the business and kimmy, you asked a good question before we came back. what was the question? >> which one makes more money. >> the right question to ask. you are thinking like investors on this. which one would you like to own a piece of it? blake, you vote. >> that's a very hard one. the reason why is because, you know facebook is a big thing. it's been around since 2004. >> good. >> a lot of people use it but like the head of apple, it would be good for you to own electronics. yes, you can program people communicating with each other but apple owns everything. >> they do everything. >> what do you think? i'll tell you one thing to think about. apple is already worth $500 billion. there's something called the law of large numbers. facebook has more possible growth but that doesn't mean you

shouldn't own apple. which do you think has more potential? isn't your blog on facebook? >> i promote my blog on twitter and facebook. it's really good. you should check it out. peace loves profit. >> oh, please, if you were not my daughter i'd say cut with the promotions. >> and huffington post. >> don't forget. >> don't do that. sorry, go ahead. >> i feel like i'm at home. go ahead. which would you own, buy, sell or hold? >> can apple get any better. >> that's a good question, too. >> you also need to think facebook has some potential. i would still go with apple, though. >> natalie? >> go ahead, natalie. >> okay. >> facebook is more for like adults but then again kids usually use apple because they don't really use facebook. i would say apple because it's

cooler. >> your friends think apple's cooler, right? >> yes. none of us use facebook. >> it's not something you can think about all that much? >> yes. >> kimmy? >> i would say apple because like most people in school use apple and everyone has apple. it makes a lot of money. >> can i be a kid? >> sure. >> apple is already moved a lot but it's no comparison. sitting there -- how do you make money on facebook? some crummy ads? if i can sell ipads, ipods, iphones, i can buy things. i'm with tim, man. not with -- who's the other guy's name. >> zuckerberg. >> that's not his name, is it? jessie eisenburg. >> i'm going to disagree with some of you guys. maybe my later years when i'm 20, 30, my opinion might change. but right now i think it's apple. but i don't really know.

maybe if we get to know a lot more of facebook and get to follow more friends and stuff like that, it might be a draw. i think right now it's got to be -- it's like my favorite fruit. but it's not a red apple on the phone. i can take my cover off. it's a gray apple. >> very good point. very good point. >> who knows what will be around in 20 years. >> it will be better phones, e-mail, come on? phones have facebook. >> i can't believe i'm wrapping you kids. you talk as much as i do. i don't know where you get that. whose son -- oh, yes, that's right. good job. all right, you guys. awesome. were you nervous? i don't think so. not really, right? >> natalie is like aren't we on tv? >> we weren't live. that was all practice.

>> oh, okay. >> it helps to look at it that way. warren buffett weighs in. we put the markets front and center, next, the fda proposing new rules that would govern e-cigarettes. you know if i ever catch any of you thinking about anything like that, you're going to have heck to pay. anyway, we have a report on that coming up in the next half hour. yuck. look at that. addict. you're an addict. true business-grade internet comes with secure wifi for your business. it also comes with public wifi for your customers. not so with internet from the phone company. i would email the phone company to inquire as to why they have shortchanged these customers. but that would require wifi. switch to comcast business internet and get two wifi networks included. comcast business

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good good morning and welcome back to "squawk box" here on cnbc, i'm joe kernen along with becky quick. andrew is off this week. is it not murphy's law? >> mergers and acquisitions, ge and drug companies and valeant. i hope it was worth it. maybe next time you think about vacation, you think about -- >> let him enjoy his vacation while he's there. >> you'll think about the rest of us and viewers that could use your -- you start a deal book for god's sake. >> let him enjoy his vacation. >> no. i want to make him feel bad. time warner cable earned 1.78 per share for the first quarter, 10 cents above estimates. that was roughly -- revenue roughly in line. the company also added 148,000 more residential customers last

quarter. that's the most in more than seven years and, yes, you're right. this is the company that's in the process of being acquired by our parent company, comcast pending regulatory approval. that's happening right now. elsewhere, insurer aetna earned $1.98 a share for the first quarter, well above estimates of $1.55. the company raised its forecast for the year after record quarterly earnings, revenue and medical plan membership levels. that's our friend, too, isn't it? the big thinker. >> mark bertelini. >> he says whatever he's thinking. >> he does. >> to the concern sometimes of some of the handlers that would like to wrap it back in. >> i've seen it. it's refreshing. >> it is. i like it. that's why we love him as a

guest. >> it's great. >> we'll have to get him back soon. let's talk about the s&p 500. it ended its six-session winning streak with the market closing slightly lower on thursday. i spoke with legendary investor warren buffett and asked him if he thought the markets were getting frothy. >> it's a big zone of reasonableness but stocks ought to be higher every ten years. there's a plow back of earnings that go back year after year. stocks will become worth more decade after decade, not in a presigh manner, even manner or anything of the sort. >> joining us right now from new york, michael ryan, chief investment strategist of wealth management in the americas for ubs. warren buffett says he doesn't think stocks are unreasonably expensive at this point. do you? >> i agree with warren. we've had a repricing of stocks

we're still at exceptionally high valuation levels. one of the things warren was getting at there, at the end of the day it's about corporate profits and earnings. we still think that the profit momentum is intact. we think we'll get high single digit earnings this year. >> where does that put you at the end of the year? >> we use six-month targets. we think we're at 1950 over the course of the next six months. we think the market will continue to go higher. i'd welcome for mid to high single digit gains over the course of the year. >> do you think this will be a slow and steady plow or do you think we'll see volatility like we've seen recently? >> not necessarily the same we've seen over the course the last five weeks but let's face it, we are getting to the point where we're in the midst of fed tapering. we get to the point where valuations are no longer as cheap as they were 12 months ago or 18 months ago. i think you'll get more choppiness in the market.

directionally we'll head higher. i think it will have to be select knife terms of the way you're positioned in markets, becky. >> meaning what? are there sectors 0 are stocks you like better than others? >> i like the sicyclicals that e geared to the capex spending cycle. we bring the next driver will be the acceleration in capital spending. it will be technology, industrials, financials. >> within technology, is that tied more to the old technology, much less to the new technology? >> it really is. it's where we think there's going to be growth, we see enterprise spending, even the hardware side. it's not some of the high flyer names that have come under pressure recently. it's the strong, steady growth names. >> good to talk to you. >> thanks, becky. the fda unleashing new rules for e-cigarettes. it's a delivery stm for niystem nicotine? >> it's better than actual

cigarettes. i'd hate to see anybody start smoking these things. i can understand it as a way to get off of real nasty smoke cigarettes. >> who would take up e-cigarettes? i don't know. nbc's tom costello will have a report on that, next. you have to become addicted to nicotine. you don't start that way. why would you even do that? >> we all pick up habits. wine is an acquired taste. beer is an acquired taste. coffee, you don't come out of the womb liking. we pick up habits we shouldn't. >> we'll have more "squawk box" coming up next. ♪

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welcome back, everybody. right now it is time for the "squawk" planner on this special bring your kids to workday. we have quarterly reports coming up on the way from several industrial giants. i need help here, guys. the first one we're waiting for includes -- >> 3m. >> excellent. the second one we're looking for is? >> call caterpillar. >> we have two big economic reports on the way today as well. weekly jobless claims. we also get the march durable goods numbers, both coming out at 8:30 eastern time. after the bell, amazon and microsoft are expected to report. that is your "squawk" planner. let's get back to -- >> joe. >> joe! back over to you, joe. >> that's a good toss. the fda is proposing new rules that would govern e-cigarettes, adding restrictions similar to

those that currently govern tobacco products. really, live, my buddy? seriously, tom? >> mr. kernan, you have never looked better with all those young fresh faces offering words of wisdom. >> i thought you were talking about yourself. you still have a young, fresh face. great to see you, my friend. i immediately think, you know, the regular cigarettes cause cancer and tar and nicotine. this isn't much better, tom. it's a nicotine addiction you're helping satisfy, right? >> yes, yes. >> tell us what are all the ramifications? >> the argument is, it helps people get off cigarettes because you don't have these 4,000 chemicals associated with smoking tobacco. and yet you're right. it is really a nicotine delivery system that comes in these e-cigarettes. they call it vaping by the way, the new proposed regulations would do the following,

essentially place these items under tobacco regulatory control. that means prohibiting sales to anybody under the age of 18. no vending machine sales, no free samples, no health claims without the fda reviewing and approving those health claims. there must be a nicotine warning label. i talked to the fda commissioner about this, dr. margaret hamburg. >> the current situation is of great concern to all of us. it is an unregulated environment with respect to these products. we think that the fda can and should have a role in the oversight of these e-cigarette products and other tobacco products as well. that's why we're moving forward today, to try to make sure that we can extend our regulatory authority to these products that are increasingly available in the marketplace and do raise very serious public health concerns. >> here's the problem.

the fda doesn't really have a firm grasp on what, if any, health risk is associated with an e-cigarette because they're not regulated. now that they would fall under fda regulation, the fda scientists can go through, do a thorough review and address whether there are safety concerns, much like tobacco. however, this is something that the consumer advocates are not happy about. there will still be no ban on online sales or market. you can still buy these onloan and market these online. lastly, no ban on tv advertising. to while you can't advertise the marlboro man anymore on tv, in theory, you could have a marlboro equivalent for e-cigarettes on tv. back to you. >> great. all right, tom, terrific. tom on "nightly" every night, brian williams favorite go-to guy. >> he gets more air time than anybody else. >> you're "a" list now.

they say, it's tom costello. >> or is that joe kernen's side kick. >> many years ago. >> don't make it so long next time. when we return, cnbc's first on 25, a profile of one of the members of the exclusive list. here's a quick hint. he's a billionaire. you'll have to wait to phone out the rest until after this break. we do have more "squawk box," right after this. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today.

predicting the future is a pretty difficult thing to do.

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we're soon going to unveil that big list, the cnbc first 25 list. we have a profile of one of the names on the roster. one of the world's richest men with one of the coolest names. carlos slim. >> carlos slim is a very influential billionaire from a developing nation. "the wall street journal" said it's hard to spend a day in mexico without putting money in carlos slim's pocket. >> his enormous net worth of $71 billion, the world's second largest fortune says forbes. they're not just in from his native mexico either. they're everywhere.

parts of a vast, global diverse conglomerate called groupo carso. >> you can describe it in one word, bold. >> he made his first round of money and became wealthy the first time around because i was buying in mexico when everyone else was selling. >> he has the strategy of buying when crisis strikes. and certainly when mexico has been through a time of economic crisis he's been able to swoop in and pick up companies perhaps on the cheek. >> that streak runs some critics the wrong way. but it has helped him build a massive empire in everything from construction, retail, to food, to the heart and soul of his wealth and power, telecommunications. his largest single holding boasts 265 million subscribers in 18 countries. >> what carlos slim did that nobody else figured out is that

the prepaid telephone model can actually be profitable. nobody believed that before he did it. he's now actually the biggest prepaid provider in the united states. >> his prepaid cell phones go for as little as $20 a a piece with "60 minutes" of use. he will put them in the hands of people who might not be able to a afford them myself. >> american mobile may be his legacy. he has many other investments. but when you look at what telecom and wireless in particular has done not just in mexico but around the world, it's what people remember you buy. >> the telecommunications tycoon controls 70% of mexico's cell phone market through america movil. not to mentioned land lines through telmex. >> it's going to be tough ownership. he's clearly the target. and so they are going to do everything they can to try to

reduce his market share down to 50%. >> perhaps particularly tough on a man who slowly and strategically built himself up to become easily the wealthiest man in latin america and uses his money not just to buy businesses but to rebuild them and his entire country. >> he's made sure he has used his personal resources and the resources of his companies to develop areas where his building is operating. >> at his core, he is a very, very smart, dedicated businessman. >> carlos slim is a symbol that mexico has arrived. to have one of the richest men in the world as a citizen of your nation says we can do it too. >> and tomorrow and monday "squawk box" will unveil a couple more members of the first 25. the big unveil is coming up on tuesday. that will start right at 7:00 a.m. eastern time. >> that's right. >> some of these people around,

aren't we, maybe? >> we might be very well. we would like to talk to some of them. see what they think about it. see what they think happened in their industry the last 25 years and what they think will happen in the next 25 years. who better than that. >> all right. do you know anyone we have yet? >> i might. i could tell you but then i would have to kill you. anyway, we are just getting warmed up. we have eli lily's cfo. g.m., 3m and caterpillar set to report. our guest host today, former white house economic adviser austin goolsbee. good morning. >> good morning. >> great to see you. ♪

[ banker ] sydney needed some financial guidance so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen.

another big day for earnings central. g.m., 3m and cat are all about to turn in quarterly report cards. >> we have the numbers and the instant reaction. >> corporate titans in the spotlight. >> apple announcing a major stock split. germ electric could be looking to make a big dea b france. >> squawk begins right now. ♪ >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm beck request quick, along with joe kernen. andrew is off this week. today is bring your kids to workday. this is our favorite day of the year. austan goolsbee is going to be with us the next few hours. good morning. >> good morning. >> it's been way too long.

>> what kind of punishments are there for forcing your kids to come down here at 5:00 in the morning. >> they were up before i was this morning. kimmy was already dressed. natalie's alarm had gone off. >> and putting that tie on. why is it so hard to look up? i'm behind him trying to -- and then blankets in the car. >> something tells me that you were not the most soothing of waker uppers either. >> that's right. >> did you set them up to come in and ransack the guests? how are you? now, wait a minute. what are your earnings? >> anyone that thinks having your kids sit live knowing what they say sometimes. i'm like a sitting -- one of

those censorship switches. i'm ready for a ramble. it could be anything. and i feel the same way with you sometimes. i'm not sure what -- you know who used to feel like that too? the obama administration. oh, my god. up in canada. he's talking about math. oh, gee. david, what do we do? no, i'm kidding. >> i know you are. you know that was totally bogus. >> i know that. but i do also know that you're my guy in terms -- we needed you i think to be there to just pull people towards the private sector once in a while. i know how you do it. i understand how you feel. many of my clients have felt that way in the past. but they found that the private sector does generate jobs. >> so he can be reasonable. >> you pulled them a little bit that way.

>> and the reason all those things came up and the whole rumor on things. you are a man who says whatever you think. honestly. i think that's a huge compliment. no one is ever going to tell you what to say on anything. you are very open and honest and says what you think. >> smart. >> i think that's a great compliment. i really do. >> you know what's going on in economics. and economics the only science in the world where completely opposite of viewpoints on what works can win a nobel prize for both? >> probably. but i appreciate you called it a science there. >> did i leave out pseudo? quasi? >> look, the thing is i think our in ability to just go run an experiment in a lab makes it more like -- i don't know. it's not physics. maybe more like biology or something. and i think the fact that you can win nobel prizes for

fundamentally different views, i think that's healthy. we have had the field of economics had a lot of intellectual ferment. it is actually pretty exciting. >> you see the new golden boy, this french guy. we're going to bring those ideas up again. what's his name? >> vichetti. i don't know. my french is not great. his argument, maybe it's not exactly what it's been portrayed. in the u.s., we're trying to jam this book into the debate over the 1%. his argument that if the returns of capital have gone up permanently. if you roll a tape forward 1 years, are we going to have 10 families that have all the money. >> it's not that it's inherited here. it's different.

we're talking about -- how do you explain alan mulally? >> look, i'm definitely not here to defend the book. i just think this idea that if capital becomes inherited and so 100 years from now the u.s. and france is 1710 or whatever, i do think -- >> of all the countries in the world, this is the place i still think if we can just get education figured out. >> i agree with that. >> if we can get it figured out this is the place you can still do it. >> i agree with that. >> there's no dukes. >> the answer is -- >> we're on a road to surfdom. >> there is not a level playing field. >> if you're born in certain areas and in certain families you have a better shot. >> absolutely. all right. we will talk more in i just a minute. yesterday you finally saw that

six session winning streak broken. dow futures 68 points up. the 10-year note at this point is looking like it's yielding 2.71%. it's been stuck there all week. investors casting a bullish eye on shares of apple. the company reported better than expected earnings. it increased stock buyback by $30 billion, upped dividend by 8%, then it declared a seven-for-one stock sphreufplt you add all that up and it's up 8%, a gain of $41. >> eli lily, 70 cents a share. revenue below estimates partly because of generic competition on sales of cymbal ta depression drug. that went just went off in

march. they have had a series they have had to deal with. because earlier this week they decided to get into the animal health business. we talk about animals that you keep healthy so you can eat them. and then animals you keep healthy because they're pets, right? >> yeah. >> some guys on our staff where the pets aren't necessarily safe from the other option either. >> oh. i thought you were going to say animals. >> i don't know. they have squirrels as pet. they compete for a meal. joining us now with more on eli lilly. a drug company. it's almost unique, suspect it, that 30% of your revenue, you have it one day and it's gone

the next. that's tough to maneuver around. >> joe, you're right. the pharmaceutical industry is unique. we're the only one characterized by pat expectations where you can severe profit and revenue cliffs we have to manage our way through. in the case of lilly, it's not a surprise. we have been preparing for some tie. in regards to our first approval asrns for seramsa for advanced gastric cancer. top pipeline data we read out in the first quarter. as you mentioned earlier, we kapld capped it off with novartis. >> a lot was written this week after that deal. you were part of a three were-way deal with that. maybe drug companies not all things to all people. we had this valeaant deal with

allergan. they said it's so hard to develop new compounds, the risk is so high, that most are developed in universities anyway. we are going to focus things we can control. that's bad for all of us. is eli lilly going to try to bring things from the lab bench to the bedside? >> absolutely, joe. really two i think, one, what you see is witnessed by the latest series of deals. companies navigating towards their strengths. for us it was animal health, with that acquisition. one of our areas of strength is in oncology, diabetes, neuroscience. so for example our innovation led based strategy centered around research is really the core of what we're about. that's allowed us to create the pipeline we had before which is the strongest in history. we have had 12 molecules between

late stage development, submission, and the last receiving approval with seramsa. it is through that focus and research effort that allowed us to create that outlook. we are sitting on the strongest pipeline of the history of lilly. that's the core of our strategy. >> we might be cusp too. they changed one letter of a dna in a mouse and these cells corrected mutation. can you imagine when we can sort of do what the immune system does and re-do the sequences to make sure people don't have genetic diseases. we can't be afraid to spend money to have big payoffs. i hope that's not where we're headed. >> joe, we are sitting at unprecedented time in our

industry. if you take our latest approval of suramsa, it is for the third most deadly cancer. we are going after the greatest need of unmet potential. if we can attack those type of disease areas like alzheimer's, we believe we can not only add to the welfare of patients but you will see really an economic boost. you will reduce the burden on the economy itself. >> hey, derrick, one more question for you. we have seen an awful lot of mma activity. zimmer holdingsings is going to be combining with biomed. $13.35 billion dealing to create a musculoskeletal innate sor to shape solutions for an evolving health care industry. does this surprise you? do you think there's a lot more to come? >> again, becky, what i think is

happening is you're seeing companies beginning to sell to areas of strict. whether i like at novartis and blackstone or what you see here with lilly. if you look at other acquisitions we acquired two molecules focused on pain. those are areas of strength for lilly. >> thank you. we appreciate your time this morning. see you later. >> just to talk about this deal again. this is just crossing. zimmer, which is the joint company. we talked about an awful lot about them. >> this is not the one in colorado. >> hip replacement joints. >> i was like, can they fix me being bald? how far away is that?

>> you said the joint company. >> zimmer and biomed teaming up. they have approved a tentative agreement which a cash and stock transaction valued at $13.35 billion subject to regulatory approvals. i'm trying to find the breakdown for how much is stock, how much is cash. i thought it was bmt, but it's not. >> i thought it was bmet. it was bmet. who are they buying it from? they might be buying from -- >> a private equity firm. >> yeah, a private equity firm. >> the acquiring stocks have been trading higher too.

we have had a lot of guests who say they have never seen this where the acquiring companies do this and making sure it makes sense for their shareholders too. i don't know where they are trading. >> 91. >> it is so strange to see acquiring companies with the stock jumping like this. >> it's going to be interesting to see too, you're getting a whole angle a lot of times for these acquisitions. in phrma. there are going to be some controversy. a lot of companies will invert and move ahead. >> that is a great conversation. we need to talk more about that. >> these are the guys in a were worried they got singled out in obama care for the medical device. >> i think they got rid of it eventually. >> they actually cut it down.

is that your idea? >> it came from congress, actually. it wasn't in the original plan. >> they wouldn't play ball. >> they have a whole bunch of more people covered so there's a lot more demand. >> and they wouldn't play ball like the drug companies. yeah, yeah, yeah. quid pro quo. >> when wii come back, warren buffett on his investment in big blue. prepare for earnings blitz. g.m., 3m, caterpillar and verizon. e financial noise financial noise

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he doesn't see a parallel back to 2001 that he warned so many investors about. i asked about one of his tech holdings, ibm. >> it depends on the price. >> $191.63 on the last trade. your average cost close to $173. in the annual report, you have seen a gabe of 12%. it's now worth closer to $13.05 billion. so what is the right price?

>> we could buy it. i wouldn't rule it out. i paid that much for the stock. >> what we asked is whether he had soured after the most recent earnings report where revenue was down another quarter. he said, no, not at all. he wasn't surprised. he bought more shares. he hasn't sold a single share. >> i'm going to watch. >> to see if he does? >> yes there were rumors with jim cramer talking about some stuff. >> if it becomes clear that, you know, they are going to get left behind by new tech. they have had a couple of makeovers already. i don't know how many times you can do that.

i don't think he will be there. he won't wait. >> aren't you with ibm? >> it's either seven or eight. we had bill miller in. six consecutive quarters, which is why he felt it was ready. i think it might have been the eighth. if it's still down a year from now that will be a different story. austan, you were talking right before break, you think it is happening because of u.s. tax policies. >> i think that's a factor. i definitely think it's a factor. that we have not sorted out our complicated and deeply messed up corporate tax system in the u.s. which we could do on a bipartisan basis. it's a motivator just itself to have transactions. even if they didn't make economic sense pause they can use this -- the difference of

this tax wedge. it gives an incentive for foreign purchases of u.s. companies and then flip where the headquarters is. the u.s. system treats u.s. companies on a worldwide basis. if you make money, you make money there. it is taxed in china. and then the ditches in the u.s. if you're a german company it's not. so if you're making profits like guys in pharma or tech, you have this incentives to flip it around. >> valeant, the canadian company, the way they can bid more than anyone else -- mr. is that wedge. >> g.e., i don't know if it's true or not, they have a different situation. g.e. got 57 billion -- 80 something in cash. and 57 of it is oversees. so they can buy a french company

and leave it over there. >> it's true, though. if you have a company as big and complicated as ge, they're going to be doing a lot of investment overseas. >> but this is the point. this irritates me. >> the worldeer taeuts you. >> no companies may 35%. they pay much lower. but the reason they pay lower is that number makes them move facilities abroad. >> traets true. >> the blended rate is naturally lower. >> that's partly true. >> because they are moving things under there. >> we have a narrow base, high rate. if you're doing a lot of r&d and physical investment, you get low rates. if you're making money, you tend he to pay high rates.

>> too many loopholes. >> it's a mess. >> in front of congress -- >> is this an argument for a simpler tax code? i would love to hear more about this. we will continue us. >> general motors is going to roll out results. the first on cnbc anywhere. the first interview anywhere with the company cfo.

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first on squawk in the street. 11:00 eastern cnbc. >> it's bring your kids to workday at cnbc. they're on the set. they are at the wall. they are now in the control word. >> natalie is rolling prompter. well done, natalie. >> i appreciate them coming up with us. >> natalie, you're in our ears too. >> i wasn't going to say anything. but the kids read prompter really well. some people cannot read

prompter. i'm not going to name any names. >> are you talking about me? >> no. he's not here to defend himself. >> he is tell me to wrap up. i have 10 seconds. up next, earnings parade starts. g.m., 3m, cat and verizon. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. e financial noise financial noise

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welcome back to "squawk box", everybody. general motors quarterly reports hitting the wires. phil, what's it look like? >> it's a kitchen sink quarter for general motors. we'll talk about all the charges included. it beat profits 6 cents a share. they were expecting g.m. to earn 4 cent a share. revenue coming in $37.4 billion. the street was expecting g.m. to bring in $38.4 billion in sales. keep in mind, there is a $1.3 billion charge relate to the

recall switches. that's the reason you are seeing $100 million in profit. the headline, g.m. beating the street on 6 cents a share, two cents better than the street. chuck stevens, cfo of general motors coming up in a few minutes. we'll go further into details on these as well as the impact. >> phil, thank you. we have 3m, verizon, caterpill r caterpillar. 3m is $1.79, the first number i see for the bottom line. i can tell you sales were $7.8 billion. might be a penny shy of expectations. 3m is giving us an outlook for

$7.30. $7.45 is the estimate. 7.8 billion in sales is also below. so 3m is below on both counts. it is down $2.97. >> verizon came in with $84 a share. that includes the five weeks in which they owned 100% of verizon wirele wireless. most made it on a pro forma basis. on that basis the company said adjusted earnings would have been 91 cents a share. i don't think you should look at this as a miss at this point. if those analysts were looking pro forma it would have earned 81 cents a share. on an adjusted earnings basis, where they are only looking at five weeks, it would have been

84 cents a share. the company talks about $1.15 a share, including nonoperational adjustments of voda phone. verizon wireless looking at service revenue of 7.5% looking for ads. $539 retail. >> breaking news, very rye whereon is a dow component. 378 still is. they keep switching them. i have to get used to goldman sachs being a dow component. i don't like change very much.

let me mention caterpillar. the bottom line number is $1.44. if it's clean, it's way above expectations. it's up $4. sales of $13.24 billion versus expectations of 13.152. that is also above expectations. however, it is increasing its 2014 profit outlook by 25 cents. let's remember this is the first quarter. just beat by 20 cents. for the year increasing by 25. so a little bit more. >> that is a new high. >> it is all about china, mining, what was going to happen

there. doug is going to be joining us, chairman and ceo. joining us i think at 8:00. >> he was okay the last time i was on. up to $1.20. then it went back to the $1.15. adjusted 2014 at $5.30 a share. but then the -- >> adjusted $6.10. >> yeah. regular. had seen 5.30. now 6.10. raising the outlook nicely. that's kind of a big story on two counts. you never know what's going on from the numbers they're looking at. how their revenues are doing tells a lot about what's going on. >> dow chemical we had on

yesterday. their growth was much better than expected. part of that is where the company was moving. >> the second is this, plus the moves from apple i think the biggest thing to be looking at in 2014 is if the earnings are going to stay strong like this, what are they going to do with the money. they have been sitting on their money for a couple of years. either they use it and invest or do they pay it out individends. >> you can expect more capital expenditure from dow. they are putting in plants down in texas the. some of that is coming right back here. >> the energy price is a big thing for dow. >> we'll get the chance to the ask about that coming up -- >> so you say don't really

believe that the numbers -- you said that about the employment numbers here. the one they point out, look at the actual job situation to see if you really believe -- >> that's fair. no, no, no. you attacked me. >> that was santelli! you said it in previous years. >> it did make sense what you said. >> anyway, austin will be with us. we have a lot more to talk about. when we come back, the ceo of pnc on the state of the banking industry, the economy and much more. >> and the chairman and ceo of caterpillar. beating the street by a long shot. raising guidance for the first year. we'll be back with more in just

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the president and ceo and newly a painted chairman of pnc. you taking the roll of chairman. what happened at the annual meeting. >> not a lot. that is good. we had a good first quarter. we're making progress in all the objectives set out for the company. that showed up in the annual meeting in the sense that it was boring, and we'll take that. >> stocks up 27% as you came in as ceo. that's nothing to sneeze at. you're a power play. you're pretty big. people don't know what to do with those banks. >> the middle child, somebody called us. fair enough. we're $300 billion in assets, which is a big bank by

historical standards. we're the first of the size of the next one up kind of thing. people struggle with that. >> are you hit by the new banking regulations? are you able to perform better? what do these things mean for you? >> at the margin, it's more cost on compliance, risk management. not all of which is bad. we are caught at times in where do we fit? are we a reg bank or more of a community bank. we call ourselves a main street bank. we take deposits, make loans, move money around the payment system for our clients, help them manage their wealth. we're a generic community bank type of activity, not a big wall street player. >> how long have you been there? >> been there 11 years now. >> did you learn the fruit of the mast senator. >> from rohr?

>> yeah. >> i did. >> carte blanche he was one of the best bankers ever. >> he is a great man. he said to say hello, by the way. >> he picked you? >> the board picked me. i guess he picked me. >> i don't need to know anything else. >> bill, what can you tell us? there's a lot of discussion that after the financial crisis, lending to business, small business lending, a, the channel has dried up. banks don't do this anymore. >> right. >> is there any truth to that? or banks getting back into this business of lending to main street u.s.? >> we have always been in the business of lending to main street. we did well through the down turn. i think what you hear, and it's true, certain of the regulations have impacted the ability for small business to get credit.

for example, part of the -- some small businesses, the owner would borrow against their home to invest in their business. if you're self-employed, it's hard tore get a loan because of qualified mortgage rules. businesses that rely on owner occupied -- the they occupy their own store to the support their business, tougher to get a loan because of some of the requirements. we work as best we can to get around that and the economy. we're doing pretty well. >> are things improving, steady, strong? >> it's good. it's strong. we will wait to see how it was affected by weather. we just got our small business survey. talking about sphaupl business. it's been done twice a year for

12 years now. across every metric on that survey, this is the best reading we have gotten. small expectations on hiring, sales improvement, capital investment. across every line item other than money. it's great. you said you're doing okay so far. keep it up. >> and the two days as chairman. >> sit up straight. this is only -- >> did jim sit up straight? >> no, he didn't. and neither the do i. commercial loans, are those ever going up? on a scale of 1 to 10, where are you on that? >> we're a 4. >> where are these people? a 4 on commercial loans. is it demand? >> it's demand. let me say this. over the last couple of months, and you have probably seen it in the fed data, you have seen

increases in cni at paces we haven't seen it before. it is showing up in utilization. i lend you a line of credit. you finance to support your business. business activity picks up. so you will draw more on the line. that is increased for us and around the industry, just over the last couple of months by a percentage. >> why do you think it is? >> activity is picking up. it's one of the things we look at. that's the single thing i watch. >> is that the reason you think the end of the year will be strong? >> you watch ceo confidence surveys, which tick up in their correlations of capital expenditures. it has got to come back. and you think about that and the impact when that flows to the general economy. you get pretty bullish about it.

the first quarter was the largest. and now the volume. >> i don't know. he's -- there's a lot to derail but a lot to look forward to. >> you know why i smile? because no matter what you throw at this u.s. economy and the u.s. people, we're going to get around it. it will come back. you're talking financial crisis. i'm talking the current administration. you're agreeing with me somehow. >> you see things go down and wiggle. it seems ultimately people want to believe. let's get back and let's start

putting the engine back. >> i'm hoping as we get in the low sixes and below six, it doesn't trickle down. i hope it happens. i hope we're not talking income and equality. it's got -- otherwise, this is all we're going to be talking about. >> you're the new guy. you came on squawk, right? there's no other outlet you'll need. >> people told me never to promise anything. you have been friendly so far. >> you don't have to sign in blood. thank you for being here. >> my bank for 20 years.

>> big outlet in cincinnati too. up next, first on cnbc with the cfo of general motors. caterpillar ceo doug oberhelman will talk about the global economy. and take your kids to work on cnbc. these little squawkers got up early to spend the day with us. "squawk box" will be right back. why relocating manufacturingpany to upstate new york? i tell people it's for the climate. the conditions in new york state are great for business. new york is ranked #2 in the nation for new private sector job creation. and now it's even better because they've introduced startup new york - dozens of tax-free zones

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u.p.s. earning 98 cents a share, 10 cents below what the street was expecting. the company says it sees four-year earnings at the lower end of guidance range. u.p.s. says usually harsh weather trimmed $2 billion. it is down two percentage points. $97 last trade. >> g.m. reported a short while ago. phil lebeau has a special guest. we're getting mail, phil. let them go back to marketing. maybe in this case we would have either. we're glad to have this guy. >> the open invitation to mary

barra is out there. let's bring in chuck stevens from g.m. headquarters, cfo of general motors joiningquarters . two cents better than expecting. revenue a little lighter. specific to first quarter, what was the difference, if anything, in terms of what you saw once the recall scandal exploded mid-february versus the first month of the quarter. what impact was on the bottom line? >> well, obviously in q1, 1.3 billion charge related to the recall campaigns overshadowing our results. we were quite pleased are results. strong performance overall. north america, earnings were actually up 500 million year over year.

that would have been the third quarter in a row. earnings up just under nine percent year over year. we were overall quite pleased with the results despite the impact. >> we saw it explode in the beginning of february. was there any change either in terms of the revenue you were bringing in in the first six weeks versus the second half of the quarter, or did you see no change at all in revenue, pricing, showroom and the impact it might have had on sales. >> it's early. i would say we are cautiously optimistic about the cost on sales. in march, retail sales were actually up. retail share was up year over year. the first 20 days of april we have seen improved sales versus march. that's testament to the strength of our new products. early but cautiously optimistic

that the new products and the launches will continue to help from a revenue perspective. actually, revenue north america was up year over year quite significantly. >> marchen sent if's was down versus february. we're still going to maintain discipline. we have not had to do anything to off set the recall. because we haven't seen it yet. >> the number one question i get sent to me either on twitter or e-mail, is this the worst it gets in terms of an investor standpoint and the $1.3 billion charge. in other words, do you see charges continuing in the second and third quarter relative to the recall, or do you look and say we're pretty confident this is everything?

>> it's too early to predict that, phil. what we are going to do is actively monitor the safety performance of our vehicles on the market. if an issue comes up, we're going to aggressively address it. what we have done is redoubled our efforts and tried to put behind us those issues that had been in the pipeline for some period of time. but very difficult to predict what could happen going forward. >> europe, a loss of $300 million. are you changing your guidance in terms of when you expect to break even or keeping it mid decade? >> we haven't changed our guidance mid decade. 300 million lost. 200 million of restructuring costs associated with the plan end of production.

>> chuck stevens, cfo is joining us from g.m. headquarters in detroit where the company beat the street. >> when we come back, we are digging into caterpillar. ceo and chairman will join us after the break.

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>> digging into caterpillar's quarterly results. >> getting a piece of apple pie. apple giving more cash to shareholders and it prepares to split its stock. >> earnings from social network giant facebook. a roundtable is ahead. >> what will wall street look like what i work there? a cnbc special report is there. >> "squawk box" begins right

now. ♪ everything was going along so well. i'm ready to not do this again. they have to play this? ♪ it's a small world after all, it's a small, small world ♪ >> i'll have this stuck in my head a month. >> at the oscars there was a woman who designed the costumes for the original it's a small world ride in disneyland. where were you? >> i was at the oscars. >> i saw how you did that. what in god's name were -- >> it was the economics.

it was very important. >> it's a social study. caterpillar reported 30 minutes ago. joining us with more on the quarter is chairman and ceo of caterpillar doug, we are on an emotional roller coaster. mining has been down. high data in terms of results, no? >> i sure like the first quarter operationally. year aefr overour pull through was great. we made $1.61 compared to 1.31%. it is really starting to show through as well. i'm happy with that.

lots of risk for the future. >> did mining get better or china or what happened? >> well, it's a mixed bag across the board. we talked about all of that in our statement. really what we saw in the first quarter was continuation in the drop in mining sales. we lower our mining outlook to take it down 20%. we raised our construction equipment to about 10%. it is really mixed all over the place. even with all the risk we see and the possibilities of other risks in china, our business is building in china. all our products and services are doing well over there. dealers are investing. that's coming along pretty well. in fact, in china, our sales

fitter quarter this year were up 30%. >> if you start looking at construction, is that china narcotics the u.s.? >> that 10% increase, the brightest spot is the united states. we had our big mining show in las vegas a month ago. just about everybody had positive stories. all our customers, dealers. it's a brighter picture in the united states. it's not great. we're stillwell below 2006 peak. at this point in 2014 the equipment business looks pretty good. >> why is that? is that housing or big commercial construction? can you break that down a little bit?

i think it is across the board. we have seen some areas depressed, arizona, florida. some of that is coming back. it is still relatively low compared to what the people of six or seven or eight years ago. it's building back slowly. we're calling for a u.s. gdp of approaching 3%. we have growth to come to make that happen. overall, we're pretty happen. i do point out -- >> go ahead. >> what is your view of emerging markets outside of china? >> nice to see you. it's a mixed bag as well. we're seeing middle east extremely hot. oil prices where they are, that continues to go along. brazil has slowed.

a lot of special approximate problems for all the games they have. southeast asia is a real mixed bag. some signs of growth. about twice what the developed countries are. it's really a mixed bag and fraught with a lot of geo-political risk right now, as you well know. >> i think about when we always talk, we have a lot of similar thoughts about private sector. i had six flat tires the last three months. we can't wait forever, can we, on bridges, on -- with goolsbee here, we can figure out a private sector, government

sector -- >> i like the way you're coming around. how do we get on the same page? >> what about bringing back some of the re-patriated stuff. we have a lot to do. how should we do it? >> the need for infrastructure is great. we all see it. our airports are antique ated. all of our contractors and our customer base are worried about that. some are running out of money

this summer. we have to find a way to get it done. we have been vocal with various coalitions. we started a new coalition to get support on this one. all of that has to be worked out. there doesn't seem to be a lot of progress right now. >> i can't guarantee they still take his calls at the white house. but he might be able -- the larry summers plan, interest rates are still low. >> i agree with that. you can't look at the infrastructure of the company. here's the thing. with the over seas profits, they agree with you. because you have $2 trillion about sitting on the balance sheet being unused. >> right. >> half of that is outside the u.s. half is here.

then the question is why is $2 trillion sitting on the balance sheet being unused. >> we have to think of a public/private way -- >> that's a really good idea. it got pulled into the same vortex that everything else has. >> seems like a no-brainer. we don't want to be a third world country. correct me if i'm wrong, wouldn't it take a lot of people working with your equipment to do this? >> it sure would. >> food stamps, disability or whatever else they're doing right now. >> well, there's no doubt that

it has been great for rebuilding jobs. we have prioritized in a way. we have got to find a way through that. austin, you are pushing on one subject that we are focal on. that's tax reform. it would simplify for a lot of us. we have been vocal about that. >> caterpillar has been vocal on that. we were talking earlier, we are now in a situation wherewith the weird system we have of narrow base, high rate at the corporate level is generating a bunch of

mma activity. just for the reason that people are trying to pay attention to the tax difference. >> it creates friction. that pharma industry is probably like that now. >> we are obsessing on minimum wage. let's just raise it. god. and global warming. can't we just do this. >> let's pick the five things we can actually do together. yell at each otherment i'm not blaming you. you yell all the time. you just have a loud voice that's not even yelling. >> sorry, doug.

this is a little spat we're having here. >> i'm enjoying the show, actually. >> a plan for corporate tax reform. it was one that a lot of people in the business sector said, hey, this is a decent starting point. >> didn't get in. >> but there's this black hole. washington has no appetite for that. >> we're focusing on small things that don't structurally help the overall picture of things. >> doug, keep talking. thanks for come canning on. great quarter. we have a lot of answers here. is she an ally? >> yeah. >> spec put it on dvr. >> i'm sure she watches "squawk box" every morning. she doesn't need a tape. >> when we come back, lots of headlines for facebook and apple.

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welcome back, everybody. facebook and apple posting

quarterly reports after the bell. the social networking giant posting a strong earnings beat but announcing cfo would be stepping down in june. that stock up 5.5%. apple beat the street and announced a 7-1 stock split before spiking on that news. they're up 8.5%. a gain of $44.5. could apple be right for the dow? joining us is daniel earnst. thanks for coming in today. >> thanks for having me. >> some pretty exciting news on both these stocks. >> yea. a lot of noise. a lot of signal. let's talk apple first. in 2012, they grew earnings 60% year over year. last year earnings fell 7%. quarterly reports up 15%. >> so what's the real -- >> a year ago it was down 18%.

if you look why it went from 700 to 400, it was the earnings growth. it didn't desell accelerate. it declined. it's the earnings to growth. 15% is meaningful. of course it was assisted by the buybacks. actual net earnings are up. >> it was assisted by lousing comps. what's it look like the rest of the year? >> comps always move around with apple. >> the reality is the number one thing that matters to apple investors is what is that category? it's going to be stabl. they're never going to grow 60% a year on the current portfolio.

google is good at it. facebook is good at it. none of it have segments they have to report out because they built them. everything else -- you search. now we are doing it inside mobile. facebook is just advertising in its place. mobile now is advertising in the news feed. apple is really innovating. they haven't done it in, oh, three years. >> it sounds like you are a believer. >> i am. 11 times earnings they returned $21 billion in cash to shareholders this quarter. that's more revenue than facebook will generate in two years. a 30-year track record in innovation. 2.5% dividend kwraoel. you're not paying a lot for the prospects. maybe they do surprise you. a lot on say it will be a wash.

you are paying a lot for that opportunity. >> do you think apple's move is idiosyncratic or a lot of money is sitting there getting paid out for the shareholders. >> they buy back more stock in dollar terms than any other company. so i think they are doing the right things. buying back stock. that's all good stuff. it's not going to move the stock 50%, 100%. it is going to do real innovation. it's a tech stock. >> let's talk quickly about facebook too. should we be concerned about the cfo stepping down? >> i'm a big believer in if it's

not broken don't fix it. it's hard to understand the numbers. facebook is very apparent. i don't understand that. hey, he doesn't understand 2 billion. maybe he is too much of a number cruncher purchase

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welcome back, everybody. we have been trying to figure out what's been happening with the stock market. we have seen some volatility that pushed things up and down, and all over the place. those sitting within striking distance of new highs. warren buffett told us that he rejects the notion that the stock market is too frothy. i asked about david eihorn's warning about a new tech bubble. >> i don't think it's like the period prior to 2001. i don't. a lot of company's valuations i don't understand. but that's always been true. i don't think it has reached that point. certainly i don't think the

general market level has got a bubble up. >> his point is that company profits continue to grow. as it happens, he said you should see stock prices that are higher. we have come a long way. >> that's been his long-time point. he's been right. over time that's where you want to be. >> he said this isn't one of the times. >> there's two ways to think about it. we have these multiples because there was something not quite right in the air. whether it was the economy or whatever. it seems to have a little more wind at his back. the other commentary was the fed hit the market up to where it was. if he was really juicing the market, couldn't they get it past 15 or 18 times earnings? >> the thing is, the earnings coming in today, this is what

will determine in the short run whether the market is worth its value or not. you just add up all the future profits of the companies. that is what they should be worth. >> the point is the whole world was growing slowly so it wasn't self inflicted in the united states. it wasn't due to policy. >> all right. we have much more coming up right now. over to joe's daughter blake. blake, you have some special friends with you. >> that's your cue. >> coming up, jobless claims and durable goods numbers. "squawk box", the number one business show in the world, will be right back.

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welcome back to "squawk box", everybody. we are just a few seconds away from jobless claims and durable goods numbers. rick santelli is standing by. is steve liesman is in studio.

our guest host austan goolsbee is here. it has been an important data point. right now let's send it over to rick. >> march durable goods up 2.6%. last month it was revised a bit higher for 2.1. let's look at all the important internals. transportation, you're up 2%. much better than our last look which is standing at .1. nondefense, business spending, some capital investment, that is up 2.2%. a stark reversal to last month's minus 1.3 that was actually upgraded to minus 1.1. that was orders. if we look at shipments, shipments up 1%. at least based on the spwerpbls, march durable goods were decent.

i'm sure the weather boys will be up and say that was part of it. they call it spring for a reason. reborn. reconsuming again in the economy. jobless claims, 329,000. that's a jump from giving 305,000. we're looking at 24,000 jump on initial jobless claims, continuing claims covering 2.68 million. markets didn't do much. real quickly, interest rates moving up a bit. we're at 3.5 in a 30-year. several basis points below it. >> stay right here. first, let's get steve liesman's reactions. >> i'm not surprised to see markets not moving even though it is better than expected.

when we don't see strength from weakness, that's when you get a selloff. minus 1.1% in february. 2.2% in march. and i can tell you over at the fed the question is what's wrong with cap bats and how can it be fixed. >> right. >> we were just talking about as the earnings came out for caterpillar, this is the big story of 2014. does cap ex come back to what would be appropriate for how fast we're growing. where is it? >> some would argue there are structural impediments created by this administration keeping it from being what it could be, the great numbers it could be in this economy.

>> you may say that. >> austan is finger pointed. >> somebody at this table just admitted that the previous -- >> what i have been saying all along, if it were policy, why do you see the same thing happening in all the other advanced countries of the world. >> because they copied your policies. >> joe is trying to back up from his previous statements. >> earlier i said isn't it great to live in a country where a bunch of impediments and head winds, in spite of a lot of things you will stable be able to do well. >> there's depreciation. >> it is still there.

>> they the use the money and pay it back to shareholders. which way that goes is going to matter. >> remember the $800 billion -- >> don't forget the friends at the irs. >> it would have been much worse if we didn't do it. >> thank god for low interest rates, austan. worked great. worked out wonderful. >> how do you know what it is right now? >> here's the way that i would judge it. i would say, okay, if you think it's about regulation, about health care, about something, let's go look at industries that are the most hit by these regulations and the least hit. do we see a difference there? on hiring and on cap ex you

don't. some already cover all on their employees. it has very little effect on them. >> that's not over yet. >> okay. there's no -- >> how many of them are delayed? there's an election coming up. >> another issue which is worth bringing up, in the world where there's excess capacity, uncertainty about the willingness of consumers to borrow to spend. >> correct. >> and not knowing what the right level of savings is in this most crisis world. why build new plant and new capacity -- >> i think steve is exactly right. >> kwroepg it's the only reason. >> it's annan environment with lack of demand and not a lot of reason. >> people were burned and very

frightened. >> that's fair too. >> i want to point out that the 3% scenario from the second quarter and beyond requires cap ex. i would not see it as the turn around. it's been weak. you need a couple together. >> to be sustainable, i agree with that. but there is a stepb areaeo to get 3% if residential construction. >> it seals like the ceos sound much more optimistic about this and sound much more willing to put their money where their mouth is. dow will be spending a lot more. this is the year. we heard it today. >> do you guys worry when you see apple. when you sigh icahn winning.

that's the way i like at this. the activists won. does that mean less r&d and less cap ex? i think apple is a unique situation. they can do it all. >> if it's increasing dividends, does s that less cap ex and less r&d? >> i'll tell you what, i looked at the apple news and watched the way the stock traded. i thought when it comes to technology it's a bit disappointing to see that mr. cook can, unlike his predecessor gets created with the balance sheet as opposed to with the gadgets. no surprise within 10 months of mr. jobs death traded the all time high of apple.

it is so rarely talked about. with regard to the economy, austan goolsbee, the programs designed -- interest rates are low. that's a wonderful thing. one of the most sensitive is housing. here we are how many years after the crisis? we had how many new home sales? 384,000? in 2005 we had $1.4 million. i rest my case. >> it was a bubble. >> whatever. it's a bubble that everyone was aware of. we didn't do anything before the crisis and after the crisis. it's a deficiency of anything good happening. it's an overabundance of too much government. and we see that as well and we're not doing anything about it. we're guilty before and after the crisis. a lot of smart economists like you wonderful at teaching students really don't do very well when it comes to

aggregating all the rules of a big economy. >> okay. do you think we'll get a rebound of cap ex or do you think they will pay out the money of dividends and buyouts? >> payouts. the money will to go back to the shareholder. icahn, you won. everyone else lost. >> thanks, rick. austan has bigger fish to fry. who did you meet at the oscars? oh, my god. oh, my god. you're standing next to oscar. >> no. i'm standing next to the most beautiful woman in the world. >> yes, you are. is she married to you? >> she married me. can you imagine? i did pretty well for myself. that was a big deal. i was going to the men's room. i kind of got shoved out of the way a little by brad pitt.

he kind of moved me. >> wow. >> i'm just looking daily is joining a hedge fund. >> that's good news. >> there's a guy that talked about being a fish out of water. being in a place not comfortable for him. chief of staff? >> he was chief of staff. >> he was an old friend from chicago. >> wrong guy for this job. >> what wall street will look like in 25 years. a special report from kayla tausche.

time for a report on the future of wall street. who knows? might not even be there in 25 years. it's there now, kayla and a great back drop. >> some suggested it will be only a relic in 25 years. all trading will be done by machines and commerce will follow growth. since the late 18th century, wall street has been the world's premier trading hub. by 2039 it will be more of an idea than a place. banks will lean on their core

businesses on liaison underwriting bonds and stocks and writing loans to consumers and businesses. that's how it should be. >> i would like to see banks going back to being community banks, irrespective of where they are locating. empowering the local economy through lending and through securing deposits. they're pulling more people into the formal economy instead of necessarily gambling on a collateralized debt obligation. >> investor agree. companies will seek independent advice on mergers. head count will shrink dramatically, especially in the financial centers. groundwork for a working population of $650,000 giving new york, london, and hong kong a run for their money.

competition will come from all over. international banks, big data, and appears in the shadows says hoffman from pwc. >> there will be a move of foot and other entities in the gamement the question is, who is going to really create the most frictionless customer experience? who is going to have the trust on of the consumer, whether it's a deposit or a loan account, and who are the regulators going to ultimately let in the business. >> we talked to consultants from pricewaterhousecoopers, oliver why man on where the future is going. tech companies will take overpayments without these huge compliance costs could end up being your run of the mill consumer spender.

a lot, joe, will change. >> yes. i don't know. because my kids decided they were e going to work on wall street. now we have to get a new plan, kayla. we'll see. anyway, thank you. we'll see you back here probably tomorrow. coming up, jim cramer joins us to break down the news. to tell you what it needs for the trading day. "squawk box" will be right back. >> cnbc is joining force toss bring the future of finance to the financial capital of the world. learn how artificial spwels and biomedicine will transform the entire investment equation. >> emerging threats and opportunities going to affect banking, traders, money managers and investors. >> register online now. ♪

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futures indicated sharply higher. i saw when i was watching and the numbers came out, the futures looked like 32. fair value down 28. 66 points. jim cramer joins us now. in the past you have owned cat in charitable trust, haven't

you, jim? >> i have. candidly, commentary on our network ahead of caterpillar ahead of the number and you could say it was mining and china related but this was all construction and energy row lated in the united states. that was the swing. i know you guys are talking about hiring. fire 8,000 people, your raw costs go down, your construction spent in his country goes up and that's how you get this magnificent quarter. >> you know, we want to do -- i think one of these days, we're going to do something here that actually maybe -- santelli started talking about a tea party and we know what happened from there. if we talk about stuff like this enough, do you think they ever get the message or it's too poison? >> they don't. the government is trying to extricate itself from doing anything other than, i believe, subsidizing anti-fossil fuels. that's -- i look at whatever the money is being spent by or what the president wants and it seems to be concentrated in that one area that is -- let's ween ourselves from fossil fuels, co2

and that's really it. even defense spending down big, congress playing a role here too, infrastructure spending doing nothing. this is all private sector. so you do not have the government doing anything here to be able to create jobs. >> anything positive. he's not an ideallog either. >> that wasn't anti-administration. when you say anti-ideal log, describing the budget is shrinking. >> try to be developing things that are $20 per when you have it $4 per natural sghoos nobody can do anything. >> the clean energy stuff is a tiny fraction of the budget and i think we ought to be trying a whole bunch of things to see if we can use -- >> use the bully pulpit. >> if you look at the ryan budget or what the republicans are putting out, i think what it shows you is that if you want to try to hold the line on spending in the way they describe, you have to basically abolish every

form of discretionary spending, all the r and d, all the infrastructure, everything you need, in my world, to stay competitive, you can't aforts ao do that if you're not going to consider any revenues and cuts to other stuff. >> dead right. >> all right. >> dead right. it's congress and the president. look, the logjam makes it so they take themselves out of the equation and because they take themselves out of the equation you don't see the kind of spend you discuss with doug. it's not going to be a factor. neither side seems to be willing to agree to any infrastructure spending of any magnitude. >> let alone tax reform. >> that's an idea that some day maybe. anyway, you may not have a place to go to work anymore according to kayla. enjoy yourself around there at the actual physical new york stock exchange. we'll see you at 9:00, jim. >> thank you, guys. >> when we return, austin goolsbee will predict the economic future for our kids. take your kids to work day and

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[ dog barks ] ♪ [ male announcer ] imagine the cars we drive... being able to see so clearly... to respond so intelligently and so quickly, they can help protect us from a world of unseen danger. it's the stuff of science fiction... minus the fiction. and it is mercedes-benz... today. see your authorized dealer for exceptional offers through mercedes-benz financial services. let's get back to our guest host austin goolsbee former council of economic chairman strategic partner at 32 advisors

and economics professor at the university school of wise busy. >> go gives you a great background where we will be in ten years for college, college prices, we have the kids here, what the future is going to look like. >> first of all i want the future to include all four of you promising you're going to apply to the university of chicago. that's good. >> inyes. >> we love chicago. we saw the report on the future of wall street. if your kids want to work on wall street what that's telling you they can still work as living in your basement and now working from the basement. i think the -- that trend in the job market that we're going to have more freelance let's call it, that's been a trend for a while and that seems like it's just getting started and the overwhelming most important thing screaming out at the day to international, national city level individuals got to get more education, more skill.

>> i don't know if a kid would grow up today in the current politically charred environment admitting to want to work on wall street. it's tough. >> that might be true. so good. let them de sign something, build a website, do whatever, get some education because boy, it's -- life has not been -- >> you're not talking necessarily liberal arts education either. a little more focused. >> i don't know. >> math. >> engineers are good. >> i think engineers have done very well but liberal arts graduates are not doing badly. you look at the unemployment rate of college graduates, it's something like 3%. >> go somewhere. >> yeah. so i think it's really important. college cost is going to still be with us. it's still going to be a huge -- >> is it going to continue to climb at a rate above -- >> i think it probably is. people are expensive and high-skilled people are more expensive and the people at big research universities are, you know -- >> talking $60,000 a year right now. you could be talking $100,000 a year plus.

>> you could be. we got to keep the focus on what -- where the costs are driving but also on financial aid. >> we cannot over emphasize on take your kids to work day, do what you love. we do what i know you do what you love, you get to go to the academy awards. i love standing up for what's right, for the american way. you're right, i do love that. we're going to ask what everyone wants. you're supposed to start. i don't know why. what do you want to be when you grow up? >> that's the thing. i have a lot of -- i have a lot of interests. i like music, photography. i don't know how i'm going to choose. >> you don't have to choose yet. those are great things. take all of your interests and keep running. >> right now i'm trying to get an "a" in math and go to a good college. >> not easy. >> something from your future? >> i don't know. i want to do a lot of stuff, but i guess an economist with -- >> that's new. that's great. >> and/or a smoke jumper.

>> the smoke jumper we talked about yesterday. >> austin, you influenced her. >> kimmy? >> i don't really know because i like to do a lot of things. um, but i was thinking about a teacher. >> that's great. >> austin does that too. >> and scotty, you are in -- going to world finals in odyssey of the mind. his team is -- is it six girls or five girls? >> six girls. >> and him. six girls and him. you're used to waiting for the goir girls to finish. >> definitely a director for a movie, an author for a book, or a producer for a video game and all that stuff. >> you know what, you can do all those too. you do the first you do the book, then you make a movie out of it and then you make a video game for the movie. that's been done. >> that works. >> and then invite your dad to the oscars. >> yeah. >> because -- yeah. who invited you? you going to come clean on that? >> never tell. >> thank you scott, blake,

kimmy, natalie, thank you, and our fifth kid here austin. you still are young like a kid, energy of a kid. >> i appreciate it. >> join us tomorrow. "squawk on the street" is next. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer, david faber at the stock exchange. hope you are ready for a wild ride. busiest day from caterpillar, gm, 3 m and verizon. taking futures higher. ten-year 2.72p. durable goods a beat, cap