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NEW YORK (
) -- If the markets can reach all-time highs with so many companies reporting miserable quarters, imagine what's possible if things actually improve. Those were Jim Cramer's thoughts on
Monday as he opined on the seemingly dazed and confused averages that have been ignoring a plethora of bad earnings.
Cramer said just about all the major companies upon which investors have come to rely had bad things to say this quarter, including
. With his charitable trust,
Action Alerts PLUS, owning both Apple and IBM, Cramer said he knows firsthand how dismal both the earnings and the outlooks have been from these former market leaders.
But the weakness continued into other stocks including
Procter & Gamble
. Industrials including
missed their numbers, as did health-care names such as
and the banks, led by
Bank of America
. Restaurants including
were not immune to the market's wrath either, he said.
But despite all of these earnings misses and dismal outlooks, the markets still rallied, and that's due to all of the other companies that didn't miss their numbers and are, in fact, doing quite well. That begs the question: What is the market capable of doing if all those companies that missed estimates are able to recover?
Executive Decision: Chuck Bunch
In the "Executive Decision" segment, Cramer spoke with Chuck Bunch, chairman and CEO of
, the chemical and coatings company that was able to beat the estimates when it reported earnings despite the fact it has a large business overseas. Shares of PPG are up 8.6% for the year.
Bunch said the global markets are a mixed bag at the moment, with continued weakness in Europe but steady growth in China. He expects only stability in Europe throughout 2013 and doesn't foresee any growth in that region until 2014. On China he remains very optimistic as that country is forecasting 10% growth this year.
Bunch was also optimistic on his company's acquisition of
North American operations, saying the merger gives PPG a number one position in Canada and is the perfect complement to his company's U.S. businesses. "There are a lot of synergies," said Bunch.
When asked about the company's plans for its cash flows, Bunch said PPG will continue its balanced approach towards its cash, which includes increasing its dividend and boosting its capital spending.
Cramer said PPG is a stock that is "not up enough" given its huge leverage to the return of the Chinese economy.
Executive Decision: Sandy Cutler
In his second "Executive Decision" segment, Cramer spoke with Sandy Cutler, chairman and CEO of
, another Action Alerts PLUS holding. Eaton saw its shares pop 2.7% after its earnings release and it currently yields 2.75%.
Cutler confirmed the global economic outlook is sluggish, but added that execution matters for companies like Eaton, and his company has been executing very well. He noted that sales were up 24% and profits by 28% for the quarter, thanks to a $50 million restructuring effort, especially in Europe, to help streamline operations there.
Cutler said Eaton's electrical products, which now account for 60% of sales, have been led by innovations in LED lighting and also by moving the company's heavy-duty power equipment products downstream into medium-sized applications. He said that aerospace also continues to be strong for Eaton because the company has products in everything from business jets to large military helicopters.
In the construction market, Cutler said commercial construction is seeing activity in some segments and Eaton is seeing some growth return in the residential market as well.
Cramer once again gave his endorsement for owning Eaton, an industrial stock that's been bucking the weak global economy and still delivering for its shareholders.
In the Lightning Round, Cramer was bullish on
Cramer was bearish on
Executive Decision: Michael Bonney
In a third "Executive Decision" segment, Cramer sat down with Michael Bonney, CEO of
, a stock Cramer found out about from a caller inquiry during an earlier show.
Bonney said Cubist currently has three drugs in late-stage clinical testings, two of which are new antibiotics. He said his company is bullish on the prospects for all three drugs, including its urinary tract infection treatment, which could represent a $1 billion opportunity.
Regarding the Cubist's antibiotics, Bonney explained that nearly 1.7 million patients acquire infections while in hospitals every year and of those, 100,000 die from them. Given the widespread use of antibiotics in hospitals, Bonney said hospitals have also become hot-beds of drug-resistant antibiotics, which is why Cubist's new drugs are s desperately needed.
Bonney commented on the company's current legal battles regarding patent infringement. He said Cubist will be vigilant in protecting its patents and expects a ruling within the next 30 days. Of the five lawsuits the company has brought, he said only one needs to win in order to keep infringing products off the market.
Cramer said Cubist has a lot of good data points coming this year and investors need to do their homework and read up on the company's prospects.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer clarified his position on
, a company he said should be bought by either Apple or
Cramer said to be clear, he does
expect Netflix to actually be acquired by either company, but the exercise does show how investment bankers would approach such a merger.
He said that Apple has been trying to expand its TV offerings, and owning Netflix would allow it to bypass its major road block, the cable operators. Meanwhile, Microsoft already has integration with its Xbox, but could do a whole lot more if it owned the company outright. In either case, Cramer said that Netflix could recapitalize its balance sheet and negotiate even better deals for more content going forward.
Will it happen? Not likely. But is it interesting to speculate on the possibilities? Absolutely.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC
-- Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, ETN and IBM.
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