Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Jim Lucas - Janney Montgomery Scott
Jim Lucas - Janney Montgomery Scott
First question on C&I where clearly that’s where the economic impact has been felt the most as you look at the actions that you’ve taken there, if we go back before the economy turned over you had talked about some of the expectations for the profitability ratios in that business, do you still see longer-term or I should say could you talk about you see the C&I segment in a normalized environment from a profitability standpoint.
Nick Pinchuk
Our view of C&I has not changed, what we’re seeing is two big changes this quarter is one I think that we spent a lot of time talking about SNA Europe and Europe is having some difficultly. Our SNA Europe business like many other European businesses are in difficulty but we don’t see that as a long-term reduction of our expectations for that business. \
If you just look at what’s happened in Europe in the recent period, you have announcements on GDP like Spain which has got unemployment of I think almost 20%, they announced their GDP was down three, and that was the good news. France was something like 3.2 down GDP in the first quarter. UK was 4.9, Italy was 6.0, Germany was 6.9, Russia which is an extension of our Eastern European business was 9.8 so they are seeing I think the bad news for breakfast hit them that we saw, the United States saw, earlier.
And you’re seeing a lot of that hit the market. At the same time we’re seeing as part of that I think we’re seeing destocking continue for our distributors. So I feel that we’re in a unique time in Europe. That economy will come back eventually. We believe actually we’re holding or gaining share if you base distributor shelf space, if you believe the reports on distributor shelf space.
So I think our expectations for SNA Europe continue. The industrial business was off quite substantially in the quarter but we believe the idea about taking the Snap-on brand out to mission critical industries is still quite valid and still being well received. So I think those businesses for the longer-term are still going to achieve the kind of mid double-digit earnings that we all expected.
Jim Lucas - Janney Montgomery Scott
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