Question-and-Answer Session
[Operator Instructions]. And we will go first to the line of Curt Woodworth with J.P. Morgan. Please go ahead.
Curtis Woodworth - JP Morgan
Yeah. Hi, good morning
Todd M. Bluedorn - Chief Executive Officer
Hi, Curt. How are you?
Curtis Woodworth - JP Morgan
Good. How are you?
Todd M. Bluedorn - Chief Executive Officer
Good.
Curtis Woodworth - JP Morgan
In terms of thinking about sort of the distribution of growth and earnings for 2008, you made a comments similar to what you talked in the Analyst Day that the first half is going to be probably a little weaker than the second half. And I wonder if you can kind of just walk me through that a little bit more in terms how different do you think the growth rates could look first half to second half? Given some of the economic data that points a potential recession, what's the level of confidence that the market did accelerate in the back half of the year?
Todd M. Bluedorn - Chief Executive Officer
Well, Curt as you know, we don't provide quarterly guidance. But let me offer you a little bit of thinking on it and a lot of this you know which is, our businesses is clearly seasonal with Q1 being our lowest revenue and profit quarter followed by Q4, with Q2 and Q3 our largest quarters. And as I mentioned and as you just reiterated, we expect the first half to be a little slower than the second half, driven in part by the new construction and residential. Couple of numbers to give you, the North America home builders' data shows that the first...we're still predicting the first half of the year will be down about 30%, and the second half of the year will be down 15%, and part of that quite frankly is just comps get easier as we get to the second half of the year after what's happened in 07.
The second issue that I have talked about and Sue had mentioned during the first half of the year is some of our retail customers have pushed out some of their orders to second half of the year, the largest being Wal-Mart. But the balance of our commercial business, which is about 60%, our contractor customers remain optimistic for all of 2008. Their backlogs look strong and they are signaling that to us. And given the growth that we've had international accounts business, the 29 new accounts that we captured in 2007 in part with our Strategos unit, we feel confident on the balance of our commercial business. So really to me that the big risk or the big softness during the first half of the year has to do with the residential market. And I think our confirmation of guidance for full year sort of reflects that.
- To read the full transcript on Seeking Alpha, click here »
