Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line Jim Crandell with Barclays Capital.
Jim Crandell – Barclays Capital
Good morning.
Chad Deaton
Good morning Jim.
Jim Crandell – Barclays Capital
Could you talk a little bit about your statements that, I guess two-part question that you thought that this coming quarter’s earnings would be in line with Street expectations? And can you elaborate a little bit more on your statement that you think that international margins have bottomed, would you say that this would apply to the – is this because that Latin America is coming out with such a depressed number, or would you also say that this enhance your margins to bottom here?
Chad Deaton
Yes, Jim. Tell me again what’s your first question, as I missed that first one.
Jim Crandell – Barclays Capital
I was a little bit surprised that you reiterated your expectation for fourth quarter earnings.
Chad Deaton
Okay. Yes, well again, my statement was if you take a look at where fourth quarter consensus is right now, it’s about $0.37, and granted we are still going to have severance charges in the quarter. We got some reorganization and BJ charges in the quarter, possibly some doubtful accounts, but if you back those out or adjust for them, we feel that the $0.37 – $0.36, $0.37, whatever the consensus is, we feel that that’s still in range for our fourth quarter. And as far as the margins that we are talking about, yes, there’s no doubt that the international margins, as Martin said, has bottomed.
Peter talked about we will be carrying some excess hedge you might say because of the transition over these last couple of quarters to make sure that we can go ahead and close the books and get things done and operate as we move from a product line focus to letting the geomarkets and regions call the shots. Those hedges will be coming out, most of that is on the international side, and as Peter said, that makes a difference of about $0.04 or $0.05 that we have been carrying in third quarter, which will disappear. So, you take that into effect, that we will see an improvement in Q4 international margins, and we expect that we will then see the benefit of these other hedge changes coming out in Q4 and Q1. So, we should be building international margins back up from here.
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