Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Doug Freedman – American Technology Research
Doug Freedman – American Technology Research
If you just look at the business from the big picture here, we’re clearly coming up in a tough environment for growth, you’ve highlighted several product segments that are growing but overall you’re top line revenue growth year-on-year looks to be challenging. What segment can you point us to over the next 12 months that you think will propel your growth?
Jerry Fishman
Its very hard to predict in the future. I think if you go back to the kind of historical growth we’ve seen in industrial products, its certainly been north of 10% annually. We’ve seen good growth in consumer products, the automotive products are growing quickly. In some segments of the communications market, the sales are growing. I think if it turns out that we post these kind of numbers for 2007 in a pretty tough environment I think that bodes well for the kind of things we can achieve when we just have a neutral environment.
There’s an awful lot of headwinds out there for growth this year and to some degree everybody is limited by that but I think we have a lot of good drivers in a lot of different places in the company that if we just get an even break from the economy and the markets that are out there around the world, I think the top line growth should be good.
One of the interesting parts of ADI has always been, we get a little bit of growth from a lot of places and I think that will continue to be the case going forward. I think putting up numbers like 7% or 8% year-over-year numbers this quarter in an environment which is very, very challenging out there, is not a bad sign for the future is the way I would describe it.
Doug Freedman – American Technology Research
Can you highlight anything underneath the covers on sort of the gross margin line, are there things going on as far as the cost structure or is it really going to be at this point mix related that’s going to help move the gross margin numbers, should we think of gross margins going forward as rather stable at this level?
Jerry Fishman
I think they are relatively stable at this level. I think if the mix goes really badly one way, it could go down a little bit. It doesn’t vary very much because of the lower large numbers. We have so many products in so many markets, no one particular segment moves it very much and the relative part of the business each of the industry segments with a lot of quarterly fluctuations really doesn’t really change very much. Industrial has been about a half of sales, communications has been about a quarter, and consumer has been about 20%. So I don’t think that’s going to change very much.
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