Question-and-Answer Session
Operator
(Operator Instructions) Our first question is from Albert Kabili – Goldman, Sachs & Co.
Albert Kabili – Goldman, Sachs & Co.
I guess the first question will be on the outlook for 08, if we just look at the first quarter $0.21 to $0.24 of EPS, that assumes a 10 to 15% decline in EBITDA and the full year guidance implies that trends get better in the second through fourth quarters. I guess if you could just talk through where you see the improvements coming?
Grant H. Beard
I think that first and foremost within our Energy Group we are seeing a re-establishment and a building of our order backlogs predominantly in our aero-engine that we sell engines and compressors out into the field. As you know we saw some weakness in the back half of the year when natural gas prices cooled down. Those prices have come up and the outlook looks fairly bullish that they’ll stay up and companies now are redeploying capital out into the field and we’ll be the benefactor of that. The remaining part of our Energy segment continues to see strong demand and is seeing great opportunities globally. Within ISG it’s a really a great demand strength in our new initiatives around medical products. We see our aerospace business building strength, not pulling back at all. In our industrial business as well our products rather while we expect fairly flat or modest sales in North America or US specifically we’re seeing great opportunities for export sales, we had great growth in 07 outside of the US and we expect that to continue into 08. A weakening dollar certainly has been a benefactor to us and I’d like to think that our great brand names and product can stand on their own but a weakening dollar certainly ahs allowed us to be much more aggressive globally. And then I think in our Cequent businesses while the first quarter was a little bit weaker than the first quarter of last year it was really as we had expected and we saw our intermediaries, the big wholesale distributors not pull as much inventory onto their shelves and we don’t see that declining, we see the broader inventory levels in the field are actually in pretty good shape, they’re not overbuilt. And we just see a tremendous amount of support for the new product initiatives we have and we think that that will drive the Cequent side of business to be able to perform in 2008 as it did in 2007.
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