Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of David Raso - Isi Group.
David Raso - Isi Group
A quick clarification on the sales comment about sequential growth. Your business is really not that seasonal when you book revenues. Can I take that comment literally about 2010 that you see 2010 up from 2009 and actually could see quarter-by-quarter you are assuming revenue progression up each quarter through 2010?
Alexander Cutler
We are making no forecast about quarter-by-quarter in 2010. That is why I specifically mentioned we expect 2010 to be over 2009. We will address the quarters when we get to January. There are some seasonality elements in our business particularly as addressed in the earliest part of the year.
David Raso - Isi Group
My question on profitability. You raised the full-year guidance to $0.35 and the two drivers were $0.26 from improved performance and $0.12 from a lower tax rate. You already captured the $0.26 in improved performance in upside for your third quarter versus the prior guidance. It looks like you are not implying any improved performance in the fourth quarter but each quarter we have seen $0.31 upside to your guidance on improved performance. Second quarter $0.34 and we just got $0.26. I guess the question is why wouldn’t you get further improving performance in the fourth quarter? Really can you help define exactly what is in the improved performance line item?
Alexander Cutler
I think the way to think about the third and fourth quarter is on a relatively small increase in volume, part of which will be FX. We actually have a change in mix that does occur and you have seen it occur in previous fourth quarters for us. This year I think what you are seeing is the late cycle businesses which are embedded in both our electrical Americas segment and in our aerospace segments, two of our highest margin businesses, are at a time period when they are beginning to decrease in quarter-to-quarter volumes. The businesses that are beginning to accelerate in terms of their volumes have been our automotive, truck and our electrical rest of the world businesses and they at the present time are slightly lower margins. So the real interplay between the third and the fourth quarter is around that issue of the mix of businesses and their respective margins they are each generating currently. That is why you end up with a relatively flattish look, if you will, over the third and fourth quarter in terms of our actual earnings guidance.
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