Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Geoff Kieburtz - Weeden
Geoff Kieburtz – Weeden
Bill, on your last comment there actually. Help me with the math a little bit here. If we had whatever we want to call it, $0.23, $0.24 positive surprise in the quarter and you’re raising the guidance $0.15, it seems to imply that you’ve kind of dampened your second half view, but you seem to indicate that you’ve not changed your view on the second half.
Bill Schumann
We don’t give quarterly guidance, and we really thought our expectations for the second quarter were higher than the Street’s. We came in about $0.15 above our expectations, relative to our thought rather than the expectations of Wall Street.
Geoff Kieburtz – Weeden
On that second quarter results, can you give us a little more color on what drove that 15% margin in Energy Production, and actually the second half forecast of 12% to 13% margin is that the new kind of baseline that you’re expecting from this division?
Bill Schumann
Well, we had an outstanding quarter, a lot of thing went right and we probably can’t expect everything, all the future quarters to go that way. We did have recovery some receivables that we thought were unrecoverable in the quarter. That added a 0.5% to the total, but we’re operating at any point time more than 100 different projects.
We go through monthly estimated, completion estimates and a certain amount of those changes every month and during the second quarter we had a lot of projects that had lower costs and therefore, increased their margins for the project. It was primarily through good execution, and I’ll let John follow up in a minute on that.
We don’t believe that we can maintain 15%. We think 12% to 13% is a reasonable number for the second half of the year. Even that will get us to margins for the full years that are record compared with 11.5% last year. So let me let John add about some details about the execution.
John Gremp
Geoff, regarding execution, we had a lot of thing go right and essentially nothing go wrong. What we’re seeing is with the slower pace of growth that’s taking pressure off the supply chain, that allows us to execute well without spending a lot additional money to make up for the overly constrained and overheated supply chain.
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