Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Brian Alexander with Raymond James.
Brian Alexander – Raymond James
Thanks. Just on the EMS segment, if I did the math right, it looks like the revenue was down about 18% year-on-year but operating income was down about 66%, so quite a bit more negative leverage than I think some of us were expecting, could you kind of talk about that and relate that to the gross margin weakness that you saw in the quarter? Thanks.
Forbes Alexander
Brian, yes – I mean if you look at where we have come from over the last couple of quarters, it is really about some of the declines we've seen in the EMS sectors we're serving there against the cost base we have in place. So going back, as we had started the beginning of the fiscal year, we are building a footprint, we are in place of about 3.8, $3.9 billion, and the EMS sector being a very large proportion of that, we expect those (inaudible). And as we come through, we have seen somewhere in the region of $300 million to $400 million of revenue peel off there. And it is a case of appropriately bringing our cost base in line as that revenue declines which we are attacking. We have announced a restructuring plan in the quarter. That is in process. We're communicating that to our employees and we should start to see benefits of that moving forward into the back half of the year. The one thing we do need is revenue declines to abate with the end markets we're in. But it is principally around the rate of decline you have seen there. Now as you point out, the consumer division is doing relatively well given the marketplace we are facing here with some sequential growth in our mobility sector, offset by seasonal declines in displays and peripherals. So it is really about appropriately sizing the cost base in the EMS sector and to a degree the consumer sector.
Brian Alexander – Raymond James
And then maybe just comment on the guidance, the pretty tight range of revenue guidance, 2.5 to 2.7 billion, but clearly a wide range of profitability of breakeven to 40 million in terms of core operating income, what is driving such a wide range of operating incomes on such a tight range in revenue outcomes?
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