Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Michael Cox - Piper Jaffray.
Michael Cox - Piper Jaffray
My first question is in relation to the out performance that you produced in the quarter and it sounds like you’re approaching the current quarter with a certainty agree of caution not unlike what you did in the second quarter. So I’d just be curious perhaps what perhaps you might have changed here recent that would give you that reason for caution.
Ron Moquist
As I mentioned Engineered Films will be down in the third quarter; electronics in comparison with last year I don’t think Tom, those comparisons are good.
Tom Iacarella
They started to show some progress beginning in the second half of last year and so the comparisons do get tougher for Electronic Systems as we get into the second half.
Ron Moquist
Well, the third quarter will be already for electronics and the fourth quarter they deteriorate. I think, Michael, you’re talking specifically of third quarter though, right?
Michael Cox - Piper Jaffray
I am just because of the big out performance in Q2, I guess it seems that you’re carrying good momentum into the third quarter, but it’s a general comments seem more cautious.
Ron Moquist
Yes, I’d say, again Engineer Films is one reason for that Applied Technology. Those comparisons again aren’t too bad. Aerostars’ aren’t too bad. I don’t think it’s necessarily that we look at the third quarter as something that’s showing weakness going forward as much as it is in a lot of cases just comparisons versus the previous years third quarter.
Just like the fourth quarter is an easy comparison, because we didn’t do very well on the fourth quarter, so I think it’s more in terms of comparisons and, Tom or Dan if you want to add anything to that go ahead and jump in.
Tom Iacarella
I think the other thing that might cause us to be a little bit more cautious as we look at the third quarter compared to the second is. We continue to see pricing pressure in films and our ability to hold our pricing and we’re also seeing cost increases in resins.
So after seeing some of the results that we had, say, in the fourth quarter, where the margins got squeeze pretty rapidly we’re concerned of that we’ll continue to see that type of pressure. So we think there’s a possibility that the margins May compress us squeezed.
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