Question-and-Answer Session
Operator
(Operator Instructions) We’ll take our first question from Michael Urban – Deutsche Bank Securities.
Michael Urban – Deutsche Bank Securities
In the North American business you’ve guided to roughly flat utilization to flat horsepower employed, what would you attribute the decline that you’ve seen? Is it continued share losses you’ve alluded to before or are you seeing any change in customer preferences as a lot of these larger guys and centralized gathering systems gain favor? What are the trends you’re seeing up there at the leading edge?
Stephen A. Snider
I don’t think the trend is any different, Mike, than it was in last quarter. I think that the difference is that we’ve seen a diminish over the duration of the last quarter as I said in my comments that was very heavily front end loaded and it appeared to be the residual of some of the market share loss we had earlier but we’re stemming the tide pretty aggressively. I haven’t seen a change in the buying habits necessarily. I think the market for contract compression remains real strong in North America certainly with all the gas work that’s going on. We just again need to get back in the game with our market share. A lot of effort with customers, a lot of work around the sales side of the business and a lot of work on execution and operations and I think it’s paying off.
Michael Urban – Deutsche Bank Securities
So to be clear, as we sit here today at the leading edge, you don’t feel like the share losses are continuing to be just stabilizing?
Stephen A. Snider
We hope that we’ve stabilized it, yes and we’re hoping that the third quarter shows much more stable numbers like Michael has guided to. We’ll see at the end of the quarter how it turns out.
Michael Urban – Deutsche Bank Securities
On the international side you spoke to some of the issues that drove the margin there but you also mentioned that you are having some success in converting folks over from fabrication type projects on an operate, do you feel like there’s any impact on the margin there going forward? Are those inherently lower margin businesses or are you trying to entice people to do that by perhaps offering a lower margin than what the traditional contract business has been international?
Stephen A. Snider
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