Building Blockbusters: Taking Stock (08/06)

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Aug. 6 (Bloomberg) -- On today's "Taking Stock," Pimm Fox helps you to think like a professional investor and discover the next "big thing." (Source: Bloomberg)

This is taking stock for tuesday, august 6 2013. how companies build block busters, manage them, and dump them when they fail.

We begin with two of the biggest media companies.

They report their report after the market closes.

Did they drive after some serious plots?

We will give you the details.

A blockbuster deal between fox sports media group and nascar.

We have the resident there to tell us more.

A house that produces more energy than it consumes.

In two decades could this be how all homes are built?

That and much more.

For a closer look at individual companies making headlines, let's go to olivia sterns.

Shares of american eagle outfitters fell more than 13% after the closing and accessories company reported a second-quarter profit less than forecast.

It cited disappointing sales.

Shares and ibm fell nearly 3% after the company said it is requiring the majority of u.s. employees in the hardware unit to take a week off with reduced pay.

They are cutting costs that amidst slowing demand for projects.

Amgen has upped its offer for pharmaceuticals for $134 a share.

Earlier this arm summer, oxygen xyen turned down to companies who know how to make blockbusters.

They reported their earnings after the market closed.

Jon erlichman joins now from los angeles with details.

What do you want to start with, the loss walt disney company?

You saw earnings that came in better than wall street was looking for, one dollar and three cents -- $1.03. their revenue number was a little soft versus estimates but still pretty close to $11.6 billion.

Much of that revenue goes growth coming from the network is news, espn, the disney channel, abc.

One of the big reasons why that is such an important part of the business is because of the fees that channels can command from paid television providers.

We are in the middle of a big auto between cbs and time warner cable.

Espn is a prime example of a channel in a position to generate massive fees from paid television providers.

That shows up in this result more show than the average trend.

The theme park a business and a film studio that still put up good numbers this i numbers with "the lone ranger" and you have the numbers.

Shares of the wall disney company up about 35% so for -- walt disney company up about 35% so far this year.

Tell us about the deeper century fox.

This is the first time they are reporting since they split off the business of news corp., the publishing arm and business that includes a lot of the businesses that are more comparable to disney.

You are seeing similar signs of growth in the number of the units there including the television and the studio business.

Now comes the part of the day where we get a little more flavor on what the executives have to say.

With both of these companies you get the sense of this content being king whether it is film or sport context.

Both companies have been in a position to back it.

Stick around.

We are going to talk more the blockbuster business, making movies.

I want to talk about -- to the owner of this website that aims to connect how it with -- hollywood with its audience.

Let's start off with the walt disney company.

I think of the "lone ranger." what a failure for them.

How much did it cost to take and bring in?

Estimates are around 200 million for how it -- how much it costs.

Worldwide i'm not sure.

But not 200 million.

They're going to have to take a write-down.

Why do the students rely so heavily on blockbusters?

Rex it is a 10 fold strategy, the notion you can make over $1 billion on one particular movie in turn into a franchise that keeps making billions.

Why not create more of those movies?

Jon erlichman, the betting on blockbusters, it is great when it works.

With the lone ranger, it is not necessarily work all the time.

That does not put a big dent in walt disney's results.

That is true.

We are talking about a studio business with disney.

We have not even seen a write- off.

You are talking about something maybe in the $100 million range.

It takes a while to get the movies made.

The more recently telegraph strategy of making movies tie to the core properties, whether that is pixar films or characters we already known or marvel characters we already know or in the future whether it is star wars characters we already know, it takes a while to get into a position where you are making all the movies at the same time.

"the lone ranger" pulls back to some previously approved film strategies.

If they wanted to spin it that way, if they could.

It is meant to take some risk out of the game.

They create a new opportunity for the likes of netflix to get their hands on also worth of interesting projects that may be do not get made into feature films anymore because studios like disney do not want to make the wrong decision and so they're trying to to take these more strategic strategy bets are based on characters that people already know.

What are some of the most successful movies this summer?

I am three.

Ironman, what else?

"despicable me 2." "world war z" lex "superman." do you get this idea that it is either celebrities or big franchises?

Yes.

To give you a little more context, despicable me as an example of universal having a very strong summer.

In the case of disney you have four films over the course of this year.

With "ironman three" and with "monsters university" and "the lone ranger" you have for films globally getting close to $2.5 billion.

In some ways disney has taken a strategy of putting out fewer films.

That does not necessarily mean less money.

To get 2.5 billion dollars is an amazing amount of money.

It also raises the question you first put, can you rely on the individual films?

Are they going to deliver for you?

What is the next big blockbuster that we have to look out for?

It could be the "hunger games" later this year.

It could be "gravity." elysium?

We'll have to watch for that.

Our thanks to jon erlichman.

We're going to discuss how nascar is powering the next generation of automobile mechanics and technicians.

We will also hear about their multibillion-dollar deal with fox sports media group.

That is next.

? talking about blockbusters and raked the ruse.

In this case, the energy -- and breakthroughs.

In this case, energy.

There is a zero home located in utah powered by the company that is the second largest residential home solar panel installer in the united states.

Today it announced it secured $200 million in additional funding.

Todd pearson joins us from san francisco.

Explain what is vivint.

It is a technology company that provides technology services into the homes, security, home automation.

We have moved into the solar business in the past couple of years.

We have had tremendous success.

We built this home in salt lake to prove even in a climate of five area ---climate five area you can produce a home that produces more energy than it uses.

That homeowner will have a zero power bill.

This is in utah.

It is called the zero home . why is it called the zero home?

X it is a rating.

It is similar to miles per gallon in a home, rating the energy efficiency of a home.

The rating on this home zero would be no power needed from an external utility.

This is a negative one -- - 1. it is how it uses the solar power analytics that we install as a company.

We are super excited about it.

How much is the house cost?

It ends of about $180 a square foot.

It is a pretty sizable home.

That can vary depending on the location and the size of family.

A very affordable home.

If you factor in that home, that market would normally have a $300 power bill.

Now it is zero . that is quite a big savings.

What is the trend for the residential housing industry?

Is this something that every home will have?

In my opinion, if it should appear the fact that it can be done and done economically.

-- in my opinion, it should . the fact that it can be done and done economically.

It was designed on herpes to do this.

We can retrofit home to do a lot of this functionality.

We spent the time and energy and desire.

It is doable.

Why shouldn't every home at some point in the future to have a zero power bill?

If you go to texas and florida and some other markets, the temperature is less severe summer to winter.

It is even easier to do.

Is a very attainable goal . how many solar panels question mark how do you store it?

The grid is really the battery.

It is still not quite up to date.

We use of net metering.

This home has like 6.2 kilowatt system on it.

During the day the sun is producing the power.

The meter is going back into the grid effectively as a battery.

In night, the consumer then uses the power from the grid so it reverses that system.

It is a partnership/combination with the utilities in doing this.

In addition to that, vivint designs and engineers at management system, lighting systems, it is all automated.

It is integrated into the system.

It was purpose built, all of it.

This is something separate of this topic that we are also doing the wireless internet network that we are starting to roll out.

We are really trying to own every single thing inside of the home.

Vivint is owned by the blackstone group, right?

They purchased the company.

Has anybody purchased the house?

No one has purchased the home yet.

They are my boss.

They are pretty nice most of the time.

No one has purchased it.

We have it as a model home.

We have started the second home.

We intend to build out this neighborhood, not the exact same home but same system, a home with zero energy bill.

I think it has a huge future.

You have to get a lot of high- end from technology companies to pull it off.

It is attainable.

I want to thank you very much.

Todd peterson joining us, the chief executive of vivint.

The president of nascar is going to join me and tell about new technology and new ways to make the cars go around the track.

That is next.

? today nascar and fox sport media group inking a $2.2 billion deal that will run through 2022. mike helton is the president of nascar.

He joins us through -- from charlotte, north carolina.

It is good to have you.

Let's begin with what you're trying to accomplish and what kind of deals have you made with media companies in order to secure nascar's future?

Obviously we are trying to grow the sport.

We do that through exposure.

We have been fortunate to have great rock has partners including ox sports group that has re-upped with us through 2024. they will continue to carry the nascar content over the terrestrial channel as well as fox sports one and help grow the sport as we look into the future.

You were previously manager at atlanta international speedway.

You helped run teledata, daytona.

What are some characteristics of a the track and how do you make it work for the sport?

All racetracks are good but they have their own unique characteristics.

Unlike football and baseball and basketball, our playing field is different every weekend.

The uniqueness of each track stand out i guess more in our form of sport.

Each one of them have very exciting component.

Naturally, the surface that the race car has to on contribute a whole lot to the fans opinions of what the excitement will hold.

You also are celebrating a 10 year anniversary of your technology center.

Tell me about this institute and what it is doing to advance the technologies of the automobile industry?

We are celebrating our 10th anniversary with the nascar technical institute here in north carolina this week and today.

That is a dozen year or so relationship that nascar has had.

They took the automotive technology criteria and combined it with a specific motorsports criteria to produce very well skilled, trained automotive experts in the field of nascar motorsports.

We are very proud of the relationship and celebrating the 10th is a big deal to us.

We have heard that many major league sports, whether baseball or foot all, are trying to put if this is on luxury boxes.

Is nascar moving in that direction as well -- emphasis on luxury boxes.

Is nascar moving in that direction as well?

All spores are trying to reach a large range of customers including corporate groups that would watch the event from a sweet, much like the football -- suite, much like the football arenas.

For some time we have had that element in our sport.

As relationships continue to grow, certainly that is something that nascar takes a look at expanding.

Racetracks want to reach a broad range of customers from the fan to those who made the event in the corporate suite.

I am going to throw a couple of names at you.

Let's start off with jimmie johnson.

What do you have for car 48? he is a five consecutive time champion.

He is the target that everybody is shooting for.

The rest of the crowd has caught up with him a little bit.

He's a contender this year.

Let's talk talk about card number 15. we have clint about your -- clint bowyer.

Tell us how he will overtake jimmie johnson or not.

Quite clint has had a couple of good seasons.

He is looking for his first championship.

I think clint would tell you very quickly that this year is fine with him to have that first one.

He finished second last year in the points.

Maybe this is his year.

What about getting new sponsors for the cars for nascar and the teams?

Is that something you are working on?

Everybody in the industry is working hard on having good, strong relationships and the race entitlement sponsors and the facilities.

Nascar official sponsors like sprint on her series of critical to the sport, dish are critical to the -- sprint on the series are critical.

They have now contributed.

I went to thank you very much.

Mike helton is the president of nascar.

Twitty six minutes past the hour.

It is time for "on the market.

-- 26 minutes past the hour.

It is time for "on the market." the nasdaq down more than 27. jc penny falling to the lowest [inaudible] they are consuming tasks much faster than estimated.

The stock fell 4%. ? of this is "taking stock" on bloomberg.

We are looking at today's market moving headlines.

Let's go to mark crumpton.

Quite bass global markets closed for almost an hour today following a computer system malfunction.

It is the fourth largest stock exchange operator in the united states.

It is working to uncover the root of the issue.

Cbs is still dark for time warner cable subscribers.

The chief executive rejected a time warner cable proposal to offer his channels a la carte.

He went on to describe the move as " a public relations gesture." the justice department filed a civil lawsuit against the bank of america over a 2008 mortgage bond deal that soured the housing collapse.

There is the sale of over 850 million people in residential mortgage backed securities.

Tonight will look at disney earnings with matthew harrigan.

That is on "bottom line" at 7:00 eastern.

We hope to see you then.

Thanks very much.

Maybe we will figure out of market got to see "the lone ranger"." president obama was in phoenix earlier today when he calls on the private market to take a bigger role in the housing finance system.

Julianna goldman joins us from washington.

What did he say?

The president said it is time now to turn the page on the bubble and bust mentality that he said caused the housing crisis bike in 2008. he outlined his long awaited -- crisis back in 2008. he outlined his long awaited proposal to bring back fannie mae and freddie mac.

He said enhancing the nation's mortgage market should come primarily from the private sector so that taxpayers are not on the hook.

Back in 2008 they got a 187.5 early in dollar taxpayer bailout.

Fannie mae and freddie mac.

For too long these companies were allowed to make huge rockets buying mortgages -- profits buying mortgages knowing if their best went bad taxpayers will be left holding the bank.

It was wrong.

In their place the president would like to see a government mortgage reinsurer of last resort of backstop only in cap acrostic -- catastrophic circumstances.

It must be wiped out before the government pays out those guarantees.

These principles really mirror a senate bill that has been introduced by bob corker and mark warner.

This is something they have been quietly been working with the behind the sees him.

Were there any other headlines as recorded?

There were.

That was the new part of the speech.

The president went on to renew calls for congress to make it easier for homeowners that do not have government-backed mortgages when they are low.

He wants to see homeowners who are in foreclosure or bankruptcy because they lost a job.

He wants and then to be able to refinance a home.

What about the timing of all of this?

Why is he saying this now?

Is it likely that anything is really going to happen?

The bigger picture is this is a big political fight that the president is trying to gear up for.

The housing market has strengthened.

Rates are rising.

The president and lawmakers want to help homeowners refinance before they get locked out.

We're seeing some momentum in congress to over health -- overhaul the financing system.

It is being crafted in the senate.

And the house measure, that wind down fannie mae and freddie mac but it would not have any government backstop that would make getting a 30 year asked mortgage.

Annie's to be the priority -- the president said it needs to get the prodigy heart -- the party -- the priority order to get.

Now on the financial mechanics.

I am joined by a senior analyst at bloomberg government.

I just heard what julianna goldman is reporting from the president's proposal.

Is it realistic?

Will they really winding down freddie mac and fannie mae?

It is not realistic.

This speech was a carefully crack it -- crafted strategy to get a deal in congress.

A very polarized congress.

What he was saying is look, i will give you some momentum toward walking out the reform and congress if you give me something i want, which is some viable economic options that i can do during my term for the middle class, including finally getting some refinance legislation through congress.

I do not think that reform is likely during his second term because the house and the senate plans are too far apart right now.

Doesn't make you scratch your head a little bit?

On the one hand he is talking about a reform of these gscs and as a result they are the housing mortgage market.

On the other hand, he talks about offering people a financial lifeline if they want to own their homes or lost their house because of job loss.

You cannot necessarily have both things at the same time or can you?

Fannie and freddie have been critical to middle-class home ownership.

Getting private capital back is nothing new.

During the housing boom, the private capital made it at least 60% of the mortgage markets.

We all know how that story ended.

What is needed is some well thought-out reform plan.

That is what needed to be pounded through congress.

The problem is there's not a consensus of the role of governments.

The house would say that there be absolutely no government role in the conventional conforming markets.

The senate saying something completely opposite.

This is what is controversial.

What the government's role should be in the market in the first place.

You have mentioned it does not look like there will be any reform in the gses during his term.

Is that political reality now?

It is economic reality.

They are profitable.

Congress and the white house, no matter what president, has wanted to reform the gse for a long time.

And i was an economist in 2005 we talked about reforming the gse's because they were too big and too profitable.

Now we want to reform them because they are too big and too profitable.

Every time they make money now, the money does not go to shareholders.

It goes to the government.

Because of large payments to the treasury, we can push out the debt ceiling a bit further.

Either cash cows for the admission -- these are cash cows for the administration right now.

There's no economic incentive to knock them off right now.

I want to thank you.

Now for a look at what wall street has on its agenda tomorrow.

Let's go to olivia sterns.

But start in england.

A new deal we governor will give his first press.

He will present the quarterly inflation report and new economic forecast.

Moving to south america, brazil will report their annual inflation rate which will likely have fallen from a 20 month high following a decline of transportation prices.

In the u.s. we look at consumer credit for the month of june.

We'll also get earnings from rhubarb, tesla, and prudential . coming up we are going to tell you about the growing demand for healthcare products.

If it ever been to the dentist, your no -- you are going to know about henry schein.

They reported second-quarter results.

Jonathan bender is going to talk to me about three wards and challenges of building a new career for himself off the -- the rewards and challenges of building a new career for his up the court.

That is next.

? the next time you visit the doctor or dentist office, it is likely many of the products were supplied by henry schein.

It is the world's largest provider of healthcare items of dental health and medical practitioners.

In the second quarters, sales of nearly 9%. adjusted earnings up nearly 11% matching estimates.

Tony mao is the -- and joining me now is the chief executive it is good to see you.

Give me a rundown on the business.

I know you have three major areas, vaccine, animal health, but i always think of the dental business.

It is good to see you.

The business is pretty solid.

If you look at our growth in the dental arena this quarter, 14% and animal health am a technology business, mid double digits.

The markets we are and are positive, leaning in very good positive direction with parts of europe.

Generally they are doing well.

The theme today i was trying to think of was blockbuster.

A lot of medical companies are always looking for a blockbuster.

Henry schein is different.

You have a distribution system.

Explain to me the relationship and this notion that a count on a blockbuster?

It is unlike the antilock brake equivalent in healthcare.

It'll be invented.

It is a pretty solid business.

Pat are becoming more popular.

And people want to spend money on them.

Absolutely.

On the medical side there is a movement to our procedures with a much more preventative care.

All of that stuff is good to us.

Periodically we come up with some very unique product.

In dentistry, what is happening is the digitization of prosthetics.

It will not happen overnight.

We will see over time the impression that today is taken with a complete just organization.

That will be exciting.

Is dental care a good proxy for the proxy of the industry?

Yes.

In better times people spend a little bit more on oral care.

Oral care is not completely elastic with the grove rates -- growth rate of the economy.

This takes place when the population has greater spending power.

We are talking a bout sales for what?

Somewhere around there.

We are approaching the $10 billion mark.

You have a little bit of a window onto the global economy.

How is the united states doing compared to the countries in asia?

Our view is that the u.s. economy is leading in a positive direction.

There are months when it is not as good as other months.

On balance it is heading in a positive direction.

So is germany.

We have challenges with a number of european countries.

Asia is moving along quite swiftly.

It is not as fast a rate as it was in 2008. the asian economy is moving ahead.

We were just talking before you came on that perhaps there are many people who have short- term memories and they do not know where the u.s. economy was in 2008. i believe that we have short- term memories.

Very few people remember where we were in september of 2008 when the banking system almost came to a complete halt.

We had to retreat quarters of challenges.

I am far more optimistic.

I think we are heading and a good direction.

Europe is challenged.

That will be behind us.

European economies will be on a positive area.

I want to thank you very much for joining us.

Much appreciated.

Coming up next is jonathan bender.

He decided to commit himself to cut his own nba career short.

Maybe you can help [inaudible] details next.

? and 1989 jonathan bender entered the nba with a blockbuster potential.

Get flashes of brilliant in the 2001 slamdunk competition to helping the pacers sweep the celtics in 2004. his career was cut short due to persistent back and knee injuries.

He is using his skills in the business world.

Jonathan joins me now.

It is a pleasure.

We just mentioned this idea that it's one thing to have aches and pains on a regular basis.

You go out and still play on the courts.

It is another thing when they really shorten your career.

It is tough, especially for an athlete.

You have been doing running and pounding your whole life and afterword you ard you get out of that.

As well as after people.

As we get older we have so many malfunctioning joints.

How did you react to the realization that you are not going to be able to play pro football anymore?

I accepted it and embraced it as a message from god to keep moving.

I never want to look backward.

I set my goals a lot higher.

I knew what i had to do.

I was able to develop and use my creativity to move forward.

Let's talk about the intensive training.

What is this designed to do?

It is designed to alleviate lower joint pressure, that pressure, it need pressure, hip pressure.

It redirects the pressure to the muscles.

It gives the muscles engaged and strong.

It is what you need.

How to do develop this?

I'm very creative as a gift from god.

I was sitting and watching how people move.

From there i envisioned it.

I went to a local cbs -- cvs or walgreens and it looked like absolute garbage.

And it works very well.

How did you turn into something that you put together with bits and pieces from the cvs?

How did you get it to the state where it is a pro-business.

Just research, reading.

I do not have anybody in my family that had built a business before.

I had to get around people who dealt in business and try to figure out how to get the product from this piece of scrap, some in that looked neat and approachable, something that you can bring to market.

And something that people would want to use.

It does not look up to par.

Most of the time you're not going to want to deal with it.

Do you use it on a regular basis?

Absolutely.

How do you keep it?

I have a workout schedule.

I work out just like i am still in the league.

I work out in every other day.

I go to.

I get my i.t. band's s and all my legs massaged on and keep stretched.

I use the project when i am engaging in my exercises and keep my muscles toned.

The idea that in order to not only play the game but to stay healthy, you have to stay conditioned and do the regular workout.

Do you stay motivated?

Like most people at the end of the day are motivated by the game.

If you know that you need to keep your body in shape and your muscles engaged, whether it is on the court or in the workplace, we are all affected by joint and back pain and all the symptoms.

We have to keep our body in shape and keep our muscles very engaged to be able to pack tech -- protect ourselves for the long haul.

Where is this located?

Where is it available to be purchased?

We are in stores in houston.

We just partnered with them to go nationwide in all 95 stores . that is a good accomplishment for us.

Our market is baby boomers.

I thought it would be more injured athletes and preventers but we are getting great results from the market.

What does it run?

It is 129 dollars.

Where is it made?

We are making it right now in china.

The idea that if you use this on a regular basis the people are able to give you feedback and whether it does stop the pain?

Pre-k's absolutely.

Just like we saw with the sciatic nerve problem.

We have people that come into the store.

They put on the product and because of the balancing of the band and the distribution of weight, it on pinches -- unpinches that nerve.

It happens right away and they are amazed.

Quite the use of these devices not only to get fit but also to alleviate pain, is this something that the professionals are going to be using in their own workouts?

For example, in the eight teams?

I think they absolutely -- for example, the nba teams?

I think they absolutely should.

Do they currently use these kind of things?

They try everything.

They have their budgets and they try all types of little budgets.

A lot of them have their own regiments as well.

I can see them using something like this.

Can you learn more about it online?

You can get more information at jbintensive.com.

We appreciate it.

It is for the six minutes past the hour.

It is time for "on the market your code the s&p 500 selling at 1697. a loss a little bit -- "on the market." the s&p 500 selling at 1697. shares of also group up 18% today.

They reported earnings that exceeded analyst estimates, indicating strong watch sales and also increasing margins in the second quarter.

All right.

Coming up we have "bloomberg west" from san francisco and a review of the walt disney company.

It's earnings as well as those of 21st century fox coming up after the close of trading today.

We are going to take stock tomorrow.

I am pimm fox.

Good night.

?

This text has been automatically generated. It may not be 100% accurate.

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