Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from Tore Svanberg from Thomas Weisel Partners.
Tore Svanberg - Thomas Weisel Partners
Yes, thank you. Good quarter. A few questions; Steve you just said backlog is stronger and your orders have been steady so far this quarter. So other than the weakness that you are seeing in Europe, anything else for your being a little bit more cautious I guess on the guidance.
Stephen Daly
No. I think that when we look across North America we see to continued steady business. We also see continued steady business coming from Asia, but the temporary weakness that we’re probably going to get out of Europe over the summer is collectively why we are giving the 3.5% guidance.
Tore Svanberg - Thomas Weisel Partners
Very good, and you talked about your aided markets in Q2. Could you just qualitatively talk a little bit about each one as we move into the second half of the year; sort of where we stand on inventories and where you could potentially see most of the growth?
Stephen Daly
Sure. While in terms of the markets, now that we are half way through the year, first point I’ll make is, in the first quarter 75% of our markets were down. In the second quarter, only half of our markets were down, so we are quite pleased about that.
As we look out into Q3, we think some of our core markets will get stronger, specifically military and microwave, and those are two of our four largest markets. We also believe we’ll see continued growth coming from the fiber optic markets.
Where we are, I’ll say categorizing as neutral would be the cellular market; we’ve had some tremendous growth in the first half primarily coming out of Asia. We think that our cellular business in the second half is going to be just a bit more tempered.
Looking at broadband, we think it will also over time begin to improve. I think the weak markets, the last two markets, the test and automotive we are categorizing as generally weak.
Overall, I don’t think that we suffer from general inventory corrections and the growth that we are seeing we believe is real growth. I did make a comment in my script that some of the growth in Q2 in the microwave segment maybe partially due to restocking at our customers and we believe that is the case, because it had such a weak Q1 and so we think some of the business in Q2 was a little bit of rebuilding.
- To read the full transcript on Seeking Alpha, click here »
