late day profit reports. first up alphabet. google grew from a year ago. we're not as strong as analysts had hoped. the company earned 9 .36 cents a share. revenue up 22% to more than $26 billion as advertisers spent more to reach users. shares however were down initially in after-hours trading as you see on that graph and our deidra bossa has more on alphabet's closure. >> you ran through the numbers. here's what it comes down to ad dollars are still alphabet's bread and butter as the company transitions from modern business era. over the last quarter google's other revenue which includes cloud business and hardware as well as google play its operating system jumped more than 62%. the take away is that google continues to make a lot of money from online advertising but it's

also investing in future businesses as well on the earnings call. google ceo said that they're now focusing away from mogul into artificial intelligence. >> deidra report frg a beautiful san francisco. thanks again. dow component microsoft reported a rise in quarter profit driven by demand for its cloud business. the world's largest software company earned 3i68 cents a share. revenue group by more than 1%. shares were volatile in after-hours trading. josh lipton has the one key takeaway. >> $14 billion that was a big number in microsoft's latest report and that is the company's annualized revenue for its commercial cloud business and that's a jump from the last time it reported results. an analyst as ever core isi that number shows the commercial cloud business is showing strong growth. he also points to its profitability with gross margins

for the business up 48%. that is a slight acceleration from the previous quarter when they came in at 49% and a bit below at least what some analysts had expected. still mcturn says this report shows microsoft pivot back to earnings growth story remains on track. for "nightly business report," i'm josh lipton, san francisco. >> stabilizing pc market helped intel's quarter the world's largest chip maker also saw an increase in demand for its data center services. earnings came in better than expected in the dow component reported a 9% rise in revenue to boot. shares dipped and rose in extended hours trading. >> it was a week for dow component cater pillar. that trimmed its sales outlook for 2017 extending a four year decline. the heavy equipment maker said one reason for the soft outlook was because of the strengthening dollar. shares dropped almost 1%. morgan brennan has more on cater

pillars quarter. >> contrary to hope it wasn't an earth moving quarter for cat pillar. sales are poised to fall for the fifth straight year as sluggish global growth and falling commodity prices have depressed demand for machine requirement in its first earnings call, new ceo noted the economic environment is still challenging and that president trump's perspective policy changes won't boost business until 2018. >> we continue to closely manage costs. we're also preserving capacity for a potential increase in business whenever that comes. there are positive signs in many of our markets but we are not anticipating an impact in 2017. >> but with commodity prices making a comeback wall street's raring for a turn around and with trump ordering a border wall, and promising a trillion dollar infrastructure overhall, the stock has soared. shares of cat posted the biggest gains of the dow last year and the continued increase has

helped cat pault the industrial average above 20,000 this week. analysts say today's result show the hard hit machinery market is stabilizing but there's still a long way to go. >> industrial america is going to get better, it's going to get stronger and the outlook is far better. it's t just doesn't happen overnight. so when the stock markets been very aggressive in driving up stocks that will benefit from policy changes and cater pill ar will just take time to happen. right now investors are paying for improvement in 2018-2020. >> in other words, shares of cater pillar may have gotten ahead of themselves and while proposed policy changes could benefit the company langer term the trump rally has spurd strength in the dollar and that could be a head wind. pressuring commodity prices and export sales. for "nightly business report" i'm morgan brennan. >> so far about 146 companies in the s&p 500 have reported

quarterly results with profits and revenue on track to reach their highest level in eight quarters a number of companies are also warning about future earnings growth so how will earnings effect the market. brad mcmillion and he joins us now. mr. mcmill lan good to have you with us. >> thank you. good to be here. >> how we are doing? and are earnings good enough to support stock prices where they are today at records? >> we're doing really well. we're actually seeing earnings growth, we're seeing fast earnings growth as the quarters go on and there's good reason to believe it'll be faster yet. >> and what is behind that? because a number of companies i think softened their guidance perhaps worried about the strengthening u.s. dollar or perhaps what the election might do to the economy and some of that has not played out very well? >> i think part of this is the classic expectations management game. what you have is the market is pricing in a lot of good news as just said for caterpillar and

executives are trying to walk that back to keep the expectations reasonable. they want it to be good but may not be as good as people expect so they'll trying to manage that. >> what are the stand out sectors and are they worth my money right now? >> i think financials are the one thing that everybody's talking about and that's absolutely justified when everybody knows it, how much more surprise is there. the one thing i'm looking at is consumer discretionary. i think that's the one area that could really do much better than people think. >> and you also like energy. >> i do but that's a more of a longer term play simply because companies are still fighting to accommodate it but the turn around is almost done and we're just about there. >> let's cast out over the course of this whole year. we're looking, we're tracking for 6% earnings growth in the recently closed quarter. what are you look forg in 2017 and might 2018 be even better if

some of the employer corporate tax rates kick in by then? >> i think 2017 is likely to be better. we're probably looking at earnings growth at least in the 10 to 15% range, maybe better. i think the corporate tax is going to be a big part of that. that could be the upside surprise that really helps matters along even further. >> now you also say utilities and industrials very quickly, might be the lag guards in this, why? >> i think they've gotten ahead of themselves. there's been a lot of expectations built in and as we shift to more of a growth type of market they're simply not going to show the growth that the market's going to want to see. >> thanks very much. >> thank you. >> the dow continues its rise one day after hitting 20,000 as investors size up the latest rounds of earnings reports. consumer stocks climbed while health care and utilities lagged today. blew chip index added 32 points. the nasdaq and the s&p 500 were

both off about one point. >> new home sales drop sharply in december, the commerce department reports that purchased of newly built single family houses fell more than 10% last month. that was the steepest one month decline since february. the decrease ow out of the housing market. the home sales make a very small percentage of the overall housing market. >> the number of americans filing for first time unemployment benefits rose last week. according to the labor department initially jobless claims which is a proxy for layoffs increased by 22,000 to 259,000. despite the increase though the overall level remains near historic lows. >> tomorrow investors will get the first look in economic growth in the first quarter of last year. president trump he wants to get the economy going more than it is now but he may have his work cut out for him. >> steve liesman.

>> does president trump have the secret sauce to make the economy boom? cnbc took a detailed look at times of the economy has grown more than 3% trump has the ingredients about half right. first thing the economy's only growned more 3% about a third of the time since 1990 so it's pretty rare. trump's promise 4% even rarer. boom like growth requires an economy firing on all cylinders. consumer spending needs to support annual gains of 3 .r5% or better but that's not even enough. productivity has to surge. it's averaged 1% average since 2010. it averages 2.7% during the boom years but that's also not enough. business spending and e. ports have to play vital roles. these are two areas that trump has promised. >> i think a lot of what he's talking about doing speaks exactly what the economy needs. certainly corporate tax reform is going to be very important to getting business investment cranked off.

businesses have been sitting and waiting to see. >> but trump's plan may be weaker in other areas. government spending also surge when the economy booms and trump's policy may depress these areas possibly limiting growth. >> obviously there are other aspects that we have to watch out for. let's see if he has success on the trade front, you know, that could be very good or it could be very bad depending on how other country's respond to what i will call a more aggressive poster to trade negotiations. >> for investors the correct bid on strong growth can be lucrative during the nine years when the economy grew north of 3% stocks returned an average of 16% so there's reason to hope donald trump gets the secret sauce right. >> still ahead why the rift between the u.s. and it's southern neighbor seems to be deep deepenning.

>> ford motor took a $200 million charge connecting to closing its plant in mexico. the cancellation contributed to a quarter net loss first since 2009 if you exkplud that charge ford recorded a profit that matched analysts estimate. ford ceo met twice this week who praised ford for abandoning its factory in mexico. >> i think we have the appropriate amount of assembly plants. we're always looking to grow our

business and use the assets we have here even more and we had a very positive meeting with the president. i mean, think about it, in the president's literally first couple days in office, he has said that he's going to focus on the economy and both manufacturing and automotive have been some of his first meetings. i view that as very, very positive for the industry and the economy going forward. >> shares of ford fell about 3% today. president trump's planned meeting with the president of mexico has been cancelled as tensions rise between the two countries. >> the president of mexico and myself have agreed to cancel our planned meeting scheduled for next week. unless mexico is going to treat the united states fairly, with respect, such a meeting would be fruitless and i want to go a different route. we have no choice.

>> the risk follows president trump signing an executive order constructing a border wall. a new perhaps 20% tax on all imports from mexico would be one way to pay for the wall, but that the financing say work in progress. >> if you tax that 50%, $50 billion at 20% of imports which is, by the way, a practice that 160 other countries do right now, our country's policy is to tax exports and let imports quote freely in which is ridiculous but by doing it that way we can do $10 billion a year and easily pay for the wall just through that mechanism alone. >> the president and leaders from the republican party are at a retreat in philadelphia and that's where john harwood is as well as tonight. let's start with the cancelled meeting. how danging might be this be to u.s./mexico relations? >> nobody wants a trade war. you heard the president in the byte you just played signaling that we're trying to cast it as a mutual decision but this is clearly a something that is

become a point of pride for mexico to resist his statement that mexico's going to pay for the wall. and you just don't know where that's going to lead and what effect it might have on the u.s. economy. mexico's a major trading partner of the united states and key part of the supply chain for american corporations and we're going to have to watch how this develops whether it's gets patched over and what the effect ares going to be on the potential renegotiation of nafta which president trump says he wants to do. >> let's talk about this import tax because it's hard to get my head around. who actually pays it? is it the mexican company that is sending the goods into the country or the american consumer who's going to pay higher prices because there's a tax build in to the product from mexico that they buy? >> according to economic advisors that i talk to today from both republican and democratic administrations it would be substantially the american consumer who would pay

that fee. nevertheless i did talk to republican member of congress late in the day who said he thought the votes would be there if, in fact, that's what mr. trump wants to do. the house republicans are eager to cast this as consistent with their border adjustment tax, but there's a complication there. there's a question of ever whether the world trade organization would include this border adjustment tax as client with our trade commitments and casting tg as a means of extracting money from mexico would complicate that cast. >> what if anything was said today about tax reform and perhaps the move to repeal and replace obamacare? >> well, these are really key subjects of division within the republican caucus, sue. they've got to agree on is there going to be a full replacement for obamacare, how quickly is that going to come? are we going to have a reform of the individual tax code as well as the corporate code or only corporate? are either of these things going to be deficit neutral? are they going to expand the

deficit? i talked to a republican member of congress afterwards who said even in a closed door meeting not a lot of new ground, not a lot of details so republican lawmakers who were expecting clues from the president today did not get them. >> on that note, john harwood in philadelphia. thank you as always. >> johnson and johnson plans to buy a swiss bio tech company for $30 billion and that's where we begin tonight's mashlgt focus. it will acquire he can talion in a disease that will add to j and j. shares were off a fraction on the session at 111.84. the "the wall street journal" says that the telecom giant verizon approached cable provider charter communications about a potential tie-up but cnbc citing sources the two companies are not in significant talks. verizon and charter have not commented on the news. charter shares up 7% at 333.15

verizon's down at 1% at 49.12 and mattel shares continued to dive the difficult holiday season called results to miss estimates. and cut it's price target to 27 bucks down from 36. the firm cited a slowing turn around rising input costs and the company's unfavorable product mix. mattel shares plunged 17% to 25.99. meantime southwest airlines said higher fuel and labor costs caused its profit to fall but results were still good enough to beat expectations. company also posted better than expected sales and ceo gary kelly says several factors contributed there. >> we had strong traffic, a strong load factor and then also a strengthening affairs especially in december, so the combination was an improvement of about a percentage point in revenues so it was very

meaningful. >> shares rose 9% to $53.92. >> northrup drummond says higher volumes of it's f-35 fighter jets helped sales rise and beat estimates. it posted better than expected profit but gave weak earning guidance for the year. they fell more than 1.5% to 226.94. increase in home sales the home builder also said it expects to see continued growth despite rising interest rates. the shares were up more than 3% to $21.18. and whirlpool posted flak quarterly profit as the maker of home planss said the worse were hurt by currency headwinds particularly a falling british pound. overall sales did grow and came in above expectations. whirlpool shares fell more than 8% though to finish out at

173.94. starbucks saw same store sales rise both domestically and globally but both results fell short of analysts expectations. the coffee chain missed revenue estimates while its earnings were pretty much in line. shares initially fell after hours and ended the regular session down a fraction to 58.46. >> coming up the growing backlash at a california university over its decision to offshore jobs.

here's a look at what to watch for tomorrow. dow component chevron reports earnings. investors will be looking to see if the company is ramping up major projects and what that means for production growth. and the first read on fourth quarter economic growth is do out and president trump welcomes his first foreign leader to the white house, uk prime minister theresa may and bilateral trade deal is expected to top the agenda and that's what to watch for on friday. >> securities and exchange commission finds citigroup $18 million for overbilling investment advisory clients. the agency says the bank overcharged at least 60,000 customers over a 15 year period. city has agreed to improve it's fee billing and books and record practices. those effected have been reimbursed. >> investors pulled the most

cash from u.s. stocks fund since the election according to the investment company institute withdraws totalled more than $3.5 billion during the latest week. that's the largest outflow since early november. meanwhile taxable fund bonds added more than $3.5 million that's it seventh straight week of gains. >> imagine your high paying job is being outsource today a lower paying country. now imagine you have to train your replacement. it's something the president has rald against and something that's currently happening at a well-known american university. aditi roy has our story from san francisco. >> reporter: in just a few weeks, robert harrison, a 57-year-old senior telecom energy at ucf will be out of a job. he'll be replaced by an offshore worker. >> it's been a very demoralizing position to be in, to know that we're coming to work to a company that's going to ship our

jobs out to people in india. >> harrison who's worked at the university for two and a half years is one of 49 career employees and 30 contractors who are being replaced by offshore workers. the uc system signed a contract with hcl an indian outsourcing company to fill the positions. the employees spoke out this morning during a regularly scheduled uc board of regents meeting. >> the cuts are part of a cost cutting program that uc officials say will save ucsf $30 million over five years. it's an issue that is made national headlines. it once again brings to the spotlight the h 1 about visa program an issue president trump has spoken out about and the need to reform it. the program brings 85,000 workers to the u.s. it's design today attract highly skilled foreign workers for jobs there aren't enough qualified american workers to fill. but critics of the program

argued since it doesn't require firms to recruit american workers first, it makes it easier for them to replace those workers with cheaper foreign counter parts. while several wokz on h 1 b advise arizona were brought in to help with the transition officials say they have since not used h 1 b workers and have no plans to do so. the l.a. times says the program has been coopted by outsourcing firms that use the visas to import workers mostly from india to replace americas in middle level i.t. jobs and many outsourcing firms grab about half of all the h 1 bs issued every year. adding more volatility to the politically charged issue, the cuts were approved by uc president janet nap nap the former secretary of the department of homeland security. but under a loophole in the visa law, displaced ucs tech workers are training their replacements. >> it's very unkmpl.

we're essentially training this person to replace us and you're going to take over our jobs. >> it's just the latest high profile case of american workers training their off shore replacements. in 2015 disney reportedly laid off workers and required some of them to train their replacements. and pg and e just announced it is cutting 180 jobs and the company's offshoring 70 of those jobs. 110 displaced workers have also been asked to train their replacements. meanwhile workers like harrison are speaking out pane worrying. >> what am i going to do? i lay awake wondering what i'm going to do. >> the workers last day is february 28th. the officials say the other nine uc campuses also have the option of using the same outsourcing firm to cut costs. however, at this point none of the other campuses have exercised that option for "nightly business report."

>> something to keep our eye on we'll be falling that story. >> absolutely. >> on that note that is "nightly business report" for tonight. i'm sue herera thanks for joining us. >> i'm tyler mathisen. thanks from me as well. have a great even everyone. we'll see you back here tomorro we'll see you back here tomoreve night.

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