Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from [William Eagen – Raymond James]
[William Eagen – Raymond James]
You talked about September being the strongest month for Oil Field inbound orders. Can you give us a sense of what’s happening during the different months of the quarter and maybe how October is looking so far?
John Glick
Let me start with how October is looking. We’re early days in October but we are seeing stronger U.S. demand. The first couple of weeks it was difficult to determine whether that’s a result of budgets being spent or a fundamental change in activity. But I think what we saw throughout quarter three, month to month, was just a steady increase really that began to gather pace I guess in mid August. And if you track oil prices, and the rig count, you can understand our bookings sort of follow both of those and we’re seeing that same thing continue as we begin quarter four.
[William Eagen – Raymond James]
And the for Power Transmission revenues, you’ve been averaging about $45 million per quarter. What do you think the quarterly run rate is over the next couple of quarters?
John Glick
It’s going to be down. I think we’re around $34 million for next quarter, so we’re going to be down pretty sharply quarter on quarter.
Operator
Your next question comes from Jeff Tillery – Tudor Pickering & Co.
Jeff Tillery – Tudor Pickering & Co.
On Power Transmission margin for the past couple of quarters has been very good. Obviously with volumes coming down, those will decline. Do you think margins on a gross margin basis can sustain the low twenties in the Q4, Q1 time frame or is that too optimistic?
John Glick
While Chris is looking for our estimate, the real issue on Power Transmission is the loss in utilization of shop.
Christopher Boone
Mid twenties should be a reasonable estimate at least for the fourth quarter.
Jeff Tillery – Tudor Pickering & Co.
With the increase of orders that you’ve seen in the U.S. and some of the international bookings that slipped from Q3 to Q4 and beyond, is it reasonable to think about the revenue in Oil Field to be kind of at least flat in Q4, or with the level in Q3, or do we see one last quarter of down take.
John Glick
I think we estimate revenue being up slightly in Q4. And again, we’re looking at kind of a gradual build from a low point in Q3 at this point.
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