Question-and-Answer Session
Operator
(Operator instructions) Your first question is from Mark Connelly – Credit Suisse.
Mark Connelly – Credit Suisse
Joe, when you look at this quarter, we certainly have seen a lot of paper companies missing, I’m curious how much of a surprise this was to you and what we should make of sales being down and orders being up, we don’t typically hear Albany talking much about order flow.
Joseph Morone
It’s an interesting pattern. In Q4 of last year we were tracking in October or November as we always track all of our indicators and they all showed that we were going to have a strong quarter. And we got to halfway through December then everything went upside down in North America. Exactly the same pattern repeated itself in the first quarter of this year. January looked good, in fact it was a little bit ahead of schedule. February looked good, in fact it was a little bit ahead of schedule.
And then March, the thing just slid right down hard and fast. So we didn’t, did we see it coming? No. Now, interestingly enough the pattern is repeating itself again. First month of the new quarter, looking good. And the reason we’re somewhat cautious in the face of very strong orders is we don’t know what’s going to happen in the third quarter until it happens or doesn’t happen. We ordinarily don’t make a big deal about orders as you well know but they’re so strong, we haven’t seen them like this in a long time.
Michael Nahl
I think the one characteristic feature of the orders that was intriguing to us that it appears our share of orders is looking very good.
Joseph Morone
Yes, if you look from everything we can tell, our orders against industry trends are looking very strong.
Mark Connelly – Credit Suisse
It strikes me that there’s two possible explanations here, one, if you look historically at the paper industry for many businesses, there’s one month that sort of makes or breaks the quarter and in the first quarter it’s March and in the second quarter it’s April and in the third quarter it’s September and in the fourth quarter it’s October.
That doesn’t seem to be what’s happening if your April is strong. But certainly for a lot of paper producers if March is weak it really didn’t matter what happened in January and February. The second issue is with respect to what your competitors are doing, you don’t have a lot of competitors with balance sheets out there right now.
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