Honeywell 4Q16 Earnings Call Notes

Honeywell International’s (HON) CEO Dave Cote on Q4 2016 Results

Net exporter

We’re a net exporter, so on balance it would benefit us from a tax standpoint. When it comes to repatriation, it depends on what the final deal is. If there is really high tax that’s put on in, well, that makes it a lot less interesting. So, we’ll have to judge it when we see it.

Animal spirits

“I would say, it’s changed become more positive. I’ve really been impress to see that improvement in animal spirits, small company CEOs, big company CEOs, a small banks that I’ve talked to, really quite surprising, so the animal spirits are real, there is no doubt about it. And hopefully if we can just get a few specs here with some actual actions that could be enough to really start turn the herd. I don’t think it takes us to crazy levels, the GDP growth and if it did that would be a problem. But I think we are going to see an improvement here, not ready to bid on it, we’re going to continue to plan for a slow growth global economy, but it still feels more positive than it has in a while coming off of worst recession since the great depression.”

A trade war is bad economically

” you have to be worried about a trade war. If it gets to that point, it’s not going to be bad just for trade, but it’s going to be bad economically, it’s kind of tough to be in economic island now especially if you are the number economy in the world. So it depends on how all that gets handled. And yes, of course it’s a concern for us.”

Better than it’s been in a long time

“Well, I do think and I’ve said this for several years that I don’t economist also really understand what happens after a severe financial recession, it was true that 30s and it was true of this one, and hit overall confidence was just really, really strong, really hard, and when you have the whole herds thinking about slow global growth and that’s just the way it is and that’s just the way it’s going to work, well, it becomes self-reinforcing because we all act that way. If you take the look at the conditions for recovery, it actually pretty good for while, they were been talking for number of years about how good consumer balance sheets were in the U.S. You look at capacity utilization, it’s in good shape, unemployment down 4.5 or so percent, you can argue under employment, but still employment in good shape, our bank balance sheet in the best condition, they’ve ever been, most companies balance sheets really good shape, and I really think it just need to spark. And the election assuming that we – the right things gets follow through and we don’t end up with some unintended consequences provide that sparks and I’m really encourage by what I’m seeing. Now it’s got to turn into something, but right now the feelings are better than I’ve seen them in long time and that could be enough to get the herd moving in the direction of saying, I’d better not miss this moment as oppose to just hunker down and keep waiting it out.”

Cote leaving

“Thanks. After 15 years at the helm, this is my last earnings call as some of you pointed out. It’s been an honor to lead the Honeywell team for this many years. And all of us are proud of what we’ve accomplished. I’ll have to say we are even more excited about what’s coming. Our outperformance will continue because we’ve invested heavily in people, process and portfolio to do the seed planting that we’ve always done.”

3M 4Q16 Earnings Call Notes

3M’s (MMM) CEO Inge Thulin on Q4 2016 Results

We are laying out a localization strategy

“As you know, we are laying out very much localization strategy in terms of our business well all subsidiaries around the world. So at this point in time, we continue to lay out the plan as we have talked about. We are making investment in what we see the most important businesses for us to grow both in the United States and overseas based on that strategy, right. So by definition, even if we have both the global customers and local customers, we need to make the investment based on what they are and what they are going.”

Don’t see excess inventory in our consumer channels

“Julian as far as the consumer business in the trends we saw throughout the fourth quarter much of this differential we saw between sell in and sell out occurred in December and in particular in the last half of December. In regards to inventory, we don’t really see the channel is having excess inventory now. We considered a fairly normal inventory channel level in our consumer channels.”

Broad based growth in industrial

‘”Well, first of all it was broad-based growth in Industrial, both in terms of the businesses and in terms of the geographical area. So that was not one specific business that type stood out of in terms of growth, even if you saw a Nick comment on – again the fantastic performance for the automotive OEM business, but it was broad-based and it’s coming back, I would say a little bit as we have talked about earlier in terms of evolution of economies.

And I think you’ve seen now as becoming more output from manufacturing around the world, we are very early in that process. And if you look upon PMI, the United States had a PMI of 54.7% in the quarter, China 51.4%, and Germany 55.6%. If you think about that in terms of big economies that will help us as we move forward, and as I said, it was broad-based.”

Should see an uptick in the energy space by the end of 2017

“yes, we should see an uptick in the end of 2017 in the energy space and we have a very strong solid business in two utilities, right. That’s a core 3M business and in fact this is a Heartland division. That division will do well.”

3M 3Q16 Earnings Call Notes

3M (MMM) Q3 2016 Results

Inge Thulin

Healthcare business in the US slowed down

“Well I think first of all, geographically, U.S. slowed down. And it slowed down basically in the last months of the quarter. And then I think there’s two other elements out there in the world that happened to that business. Some, it’s in developing economy where Brazil had a little bit of slowdown that was more than we expected. And then as you know, things are going on in Central East Europe, specifically in Turkey, that tempered it, generally speaking. So when you look upon it from a business perspective, if you tempered in United States which we did, that would go over all businesses. The U.S. I think tried to move some purchases forward maybe one to two quarter. That’s what we’re talking about, like mid-term or short-term tempering.’

Will see positive industrial growth in 4Q driven primarily by comp

“so it being U.S. that hold back Industrial during the last couple of quarters, it was better in Q3. So that’s positive, and we will see positive growth for Industrial in Q4. And that will be driven exactly as you said relative to we start to deliver now on the body armor. And we see some uptick in some of the other businesses. But it’s very much the comp that will be a driver for us in Q4 and as we go into Q1. ”

I’m very positive that we start to see industrial turning the corner

” I’m very positive that we, now we start to see Industrial turning the corner as we move forward. And we will see the first quarter happen here in Q4.”

The portfolio of acquisition targets is rich

“as I’ve said the portfolio is rich in terms of candidates. I’d rather do slightly bigger than smaller. As I said earlier, we have during the last couple of years stepped up our probability – or the output on what we have done. And by definition, in order for us to move the needle forward, they should more sizable than we did in the past. So I think I hold it for then. Then when the news are coming out, we’ll look upon the size of them. But we are ready. I mean we are ready. We are ready. I think we’re on a good position to do what we need to do in order to bolster growth with or without acquisition. Also organically, we’re doing okay.”

Not too concerned about Healthcare slowdown in the US

“Yeah. I think the reality of business is that it will be both. But it start by people holding back a little bit and then they work down the inventory. But it’s not an inventory correction in any sort or shape or form. I think it is yes, that people have a little bit of uncertainty here in the quarter of how this will shake out and then they’re ready to go again. So I think it’s a normal reaction for anyone around the world when you’re going into a period of uncertainty relative to, will there be any changes or policies as you move forward, et cetera. So I’m not too, honestly, I’m not concerned at all – as I said, and you like to see more growth there of course with the margins we have. But it’s not overall concern at all.”

Nicholas C. Gangestad – 3M Co.

Anticipating a sideways move in 2017

“. As you can imagine, we’re still working on our 2017 outlook. And on December 13, we’ll provide more details on that at our outlook meeting. At a high level, Andy, we expect an external growth market to continue moving sideways in 2017. That’s the overall external picture we’re anticipating. From a business perspective, we do expect our Industrial and Electronics & Energy businesses to have improved growth rates in 2017 versus what we’ve been seeing in 2016.”

General Electric at Morgan Stanley Conference Notes

Lorenzo Simonelli – President, GE Oil & Gas

We’re here for the long term

“look you all know what’s happening in the industry; we’re in this though because we look at the long-term and we still say that the macro trend is positive for the Oil & Gas industry. When you think about the growing population, the growing consumption of energy demand, we’re long and we think that we’re in the right segments as well. When you look at LNG, you look at gas going from coal to cleaner hydrocarbons; when you look at the unconventional space, also deepwater coming back. So the industry is going to be cyclical and it’s going to continue to be cyclical but the long-term trend still bodes well. And that’s why we came into this. We didn’t come into this industry over 20 years ago because we were looking at the price of oil. We came into this industry because we were looking at the long-term trends and also how it fits into GE portfolio. And that’s something that’s important to understand.”

Early days to say we have bottomed out

“Well, I think it’s early days when you start to say have we bottomed out and you’ve got to look at it from both North America perspective and then a global perspective, and in North America you’re starting to see some indicators, you’ve seen them externally like I do where rig count has started to improve. Internationally, you’re still seeing a decline. So I think it’s early days, this industry is volatile, it’s cyclical and we’ve got to be ready for that volatility. So I think the best thing we can do is stay the course on the actions that we’ve put in place and really look at the industry as paying an output of more than the major input. So we’re focusing on our cost out and focusing on the product side. And then as we — we know one thing, the depletion rate to there, we believe in the long-term from a macro perspective, the energy demand and the requirement for Oil & Gas to time it exactly when the turning point is, that’s what we’ll wait and see.”

We think additive manufacturing is a game changer

“I think it’s a game changer and when you look at what we’ve done in the space of additive and 3D printing, we are early entrants, a great move with regards to buying the capability now to have the machines that can manufacture and actually the printers that enable us in our factories to create the 3D printed spare parts, the blades; and the huge advantage for us is, you think about a future where our service shops or our customers that have large installed bases now have a printer outside. You take out all that lead time, you take out all that working capital that was previously deployed and this is a game changer. We are already utilizing it within our factories as much more we can do. We’re working with David Joyce, who really has the center of excellence for additives within General Electric. And we view this across the company as an opportunity and for GE oil and gas, I view it as a way that we can be differentiated again and be more meaningful for our customers and be more efficient.”

3M at Bernstein Conference Notes

Emerging market operations are higher margin because not using things that we built for the way things were done in the 60s and 70s

” I think you have to think about this, there’s always – you’re coming from somewhere, right, and I think when you start to build businesses back in to 1960s and 1970s and so forth, you build another type of infrastructure that you know in emerging and developing market do not need, you can capitalize from other entities around the world. And I think you learn, right. The world has changed in a way as you move ahead and my view is that 3M successfully was built on innovation and empowerment locally. That was the power. But that’s also meant that you build your own entities in many, many countries. I think that was very successful in the 1960s and 1970s, 1980s and 1990s. Today it’s not, right. So I think you need to be bigger and more relevant and drive leverage in your organization”

A lot has changed in six years

” when I came here six years ago, if you think about six years ago, at that time the developing world looked different for everyone, right. We talked about BRIC, if you think about BRIC today, you’d wonder where did they go, right; Brazil, Russia, India and China, right. So if you think about that perspective, that have changed for everyone. It’s not 3M, everyone. And you think about United States today, we thought six years ago, we were not overly excited about United States or West Europe. You look upon it today in relative terms United States and West Europe is okay, slightly better than okay. And then you looked upon the developing economy have slowed. ”

If you want to be a global growth company you must grow in the US and China

“If you decide to be a global growth company, global growth company, if you decide that, we have, then you need to grow two places guaranteed: the United States and China. You need to grow everywhere, but if you don’t grow in United States and China, you will not be a global growth company.”

…” if you are a global growth company, if you don’t grow in the United States and China, you have an issue. It doesn’t matter if you grow very well in Chile and Norway and Sweden and Finland, it doesn’t matter, you have to grow there, but you must grow in the United States and China.”

China is the second biggest economy in the world and it’s not moving from export to domestic

” I view China is the following way. It’s the second biggest economy in the world. It will be big and it is big and it’s growing. It’s also wrong perception to say that they are going from export to domestic. They’re not. They are continuing with export and they complement and build out domestic businesses. That’s what they do.”

3M Investor Day Notes

Inge Thulin

Infrastructure > Manufacturing > Retail > Healthcare

“as you know, in all economies, you have the evolution of infrastructure coming first, followed by manufacturing, after that, safety coming in place, then you have retail and then finally healthcare is the evolution of all economies and it’s true for all economies around the world. This is the way it goes.”

Paul Keel

Manufacturing is one component of supply chain, logistics, engineering and procurement are others

“manufacturing is one of our four fundamental strengths, very important. But manufacturing is just one component of supply chain at 3M. We also lead logistics, engineering, procurement and a number of other activities”

Drive returns with automation

“Pick a 3M product that you know well, post-it notes, scotch tape, Tegaderm dressings. These products run at line speeds several fold what you will find in a competitive plant. And when you automate this level of process capability, as you can see, the returns are very attractive. Now, those of you who have been following us for a while know that Lean Six Sigma is the foundation of our culture of customer centricity and operational excellence.”

Six sigma has yielded $16B in benefit to this company

“Since inception in 2001, Lean Six Sigma has generated over $16 billion of benefit for our company. We have completed more than 100,000 projects and we have trained more than 75,000 employees. And despite being more than a decade into the journey, we find that the impact from Lean Six Sigma continues to grow. In 2005, an average project for us yielded about $300,000 of benefit. By 2010, that number had grown to $450,000.”

Frank Little

7 million people died from air pollution in 2012

“There are over 120 million workers that are exposed to dangerous noise levels in the workplace today. Over 1 million people die in traffic-related accidents with over 20 million additional injuries. And in 2012 alone, there were more than 7 million people who died from air pollution-related health issues.”

Mike Roman

We stay very close to the customers in auto

“In automotive, that means we align our organization around our top 20 global OEMs. We get very close to them, sales, marketing, supply chain, technical top to top. We engage them on a regular basis. We get deep understanding of their challenges, leading to opportunities for designed-in unique solutions from 3M. We also get a very clear understanding of their value chains and so we can better support their tier suppliers. This deep engagement leads to an understanding of the market trends and what’s behind the market trends and you can see some examples here around fuel efficiency, light-weighting and electrification.”

Products come from listening to what our customers need

“This understanding leads to customer-inspired innovation, acoustic control, lightweight assembly and increasingly, solutions to help enable the use of aluminum in automotive manufacturing. Ultimately, all this turns into high-value 3M products, 3M Thinsulate acoustic control, glass bubbles for light-weighting and acrylic foam tapes to help solve the increasing complexity of the bonding solutions as automotive manufacturers introduce new materials and dissimilar materials.”

Jim Bauman

By 2030, 50% of component costs of an automobile will be electronics

“By 2030, 50% of the component cost of an automobile will be electronics. What we will do is leverage our existing partnerships. Mike talked about it, the automotive OEMs, the deep understanding at the tier”

Joaquin Delgado

Four industry success enablers in healthcare:

“We see that there are four industry success enablers: prevention; care pathways innovation; digitization; and health economic-based outcomes. A health economic-based outcome is that the outcome is going – has to be based on the clinical outcome that it delivers that solution, but also the economics that are associated with it. So, we see more and more the need to make the decisions by not only just in clinical data, but it’s in economics data put – being put together.”

H.C. Shin

Healthcare is the fastest growing and most profitable business for international

“I will start from healthcare. Joaquin talked about healthcare. We love healthcare. That’s the fastest growing and most profitable business for international. It has been growing very, very nicely. And I think we can accelerate the growth rate in healthcare. Why? Because healthcare spending is increasing rapidly, whether in developing – even in developed market, healthcare spending is growing very, very nicely. ”

Nick Gangestad

Seeing organic growth still down slightly but tracking better than expected

“Before I head into the main portion of the agenda, let me just comment on what we are seeing so far in 2016, where we remain on track for the planning estimates that we shared in our December Outlook Meeting. As we further stated in January, giving a little more color about first quarter, we stated that we are expecting first quarter organic growth to be very similar to what we saw in the fourth quarter, which was down slightly. And as the quarter is progressing, we are seeing four of our five businesses tracking either at or above what we were expecting at that time. Those are Healthcare, Consumer, Safety and Graphics and Industrial. Our Electronics and Energy business is trending below our expectations. We are seeing end-market demand weaker in the Electronics and Energy business. So, we are trending to a first quarter organic growth that is low double-digit decline due to softer consumer electronics.”

Allegheny 2015 Shareholder Letter Notes

Jeremy’s Notes

Allegheny (Y) CEO Weston Hicks says the company is paying off debt in order to remain financially flexible should investment opportunities arise in the coming years

“We are sometimes asked why we are deleveraging at this point, with interest rates so low. The answer is when heading into stormy seas it makes sense to batten down the hatches. We believe that financial flexibility and corporate resiliency will be more valuable in 2016 and beyond.”

Allegheny (Y) CEO Weston Hicks says the world seems to be transitioning to a deflationery environment

As I have noted in prior years, the world economy appears to be transitioning to a slower growth, deflationary environment. Factors contributing to deflation include world economies in a “debtor’s prison;” excess capacity in commodity markets; deteriorating demographics in OECD countries as well as China; automation and robotics eliminating jobs; technology allowing for capitalism to be replaced by the “sharing economy;” and a continued lack of income growth for the vast majority of the country, in part a result of highly concentrated savings. In such an environment, it is possible that our growth will depend on capital reallocation and the effect of deflation on our $10 billion of net loss reserves.”

Scott’s Additions

In these conditions it is easy to fall into the trap of thinking that more risk is better

“Financial markets have been extremely favorable for the past six years. Following the 2008 Financial Crisis, equity investors have enjoyed a long period of positive returns, as the S&P 500 recovered from its early 2009 low of 666 to over 2000 at the end of 2015. Insurance markets too have been accommodating. Global catastrophe losses have been significantly below average levels for the past three years, and liability claims inflation has been subdued. With conditions like this, it is easy to fall into the trap of thinking that more risk is better.”

Increase risk when the market pays you to

“Alleghany’s approach is to increase risk when the market price of risk is high and to decrease risk when it is low. Today, expected returns on most investment classes are low, so we have tried, for the most part, to stay at the higher end of the quality spectrum, whether we are talking about bonds or equities.”

We focus on what we can control–growing the intrinsic value of Alleghany corporation

“Of course, the performance of our stock price – which can be easily blown around like leaves on an autumn day – can deviate from market returns over relatively short (3-5 year) periods of time based on investor preferences, stock price momentum, and other factors beyond our control. Because stock prices today are increasingly a function of basket trades (due to indexing), momentum strategies (due to increased computer power and lower trading costs), and algorithmic trading, we focus on what we can control – growing the intrinsic value of Alleghany Corporation over the long-term – and hopefully making intelligent risk and capital allocation decisions.”

Last year I said that the stock market appears to be fully valued, I wish I was wrong

“In last year’s annual report, I said that “the U.S. stock market appears to be fully- if not over-valued, especially considering the fact that many companies are producing little revenue growth and continue to enjoy record profit margins. Equities appear to offer attractive returns only in comparison to the sub-2% interest rates offered on U.S. government bonds.” In early January, the stock market, as measured by the Russell 2000, was about 20% below where it was at the end of 2014. I wish I had been wrong ”

China will have a difficult time transitioning to a service based economy

“China’s demographic profile, massive debt overhang, and underdeveloped social safety net will make the transition to a consumer-driven, services-intensive economy difficult.”

When the Fed started QE it entered the Hotel California

“We believe that when the Fed started quantitative easing, it entered Hotel California. As the classic Eagles song concludes, “you can check out any time you like, but you can never leave.””

Danaher 4Q15 Earnings Call Notes

Danaher (DHR) Thomas Patrick Joyce on Q4 2015 Results

Slowing in December clearly impacted our industrial businesses more than others

“what we’re assuming is that what we saw with some of the slowing in December is essentially the environment that we’re going to see in the near term here. It’s clearly impacting our more industrial businesses more than our other businesses”

Fortunately the Euro has stabilized

“Fortunately, the euro has stabilized so the overall currency impact is not what it was in 2015, but there’s a little bit of a negative right now.’

Having trouble getting a sense of channel inventoriesThe environment is favorable for us in terms of M&A. THere are more people on the sidelines than in previous days

“I think the environment is generally a favorable one for businesses like ours with a balance sheet that’s ready to deploy into small and midsized situations. And I think to your question, there are some folks who are perhaps a bit more on the sidelines right now than in previous days.”

We actually saw Middle East numbers hang in through the middle part of the year

“We’re trying to be increasingly conservative as we see how government funding is being influenced. I think it was interesting watching the course of the year. Oil continued to drop, as you know, throughout the course of the year and yet we actually saw our Middle East numbers hang in there reasonably well throughout the middle part of the year and it wasn’t until the latter part of the year that we saw a more acute shift in the Middle East. And so there was a little bit of a lag there and it’s taken a bit of time for the team to fully recalibrate.”

Daniel L. Comas – Chief Financial Officer & Executive Vice President

Markets have opened up M&A opportunities

“Clearly what’s going on in the high yield market has made it very difficult for the private equity parties, let alone industrial companies that have a lower credit rating. So, some of the anxiety out here is definitely helping some of the conversations. So, on the margin, we’re a little bit more encouraged than we were 60, 90 days ago on the M&A front.”

GE Annual Outlook Meeting Notes

Jeff Immelt – CEO

China is not bad for us

“China is not bad for us to be honest with you. I’ve been doing five-year plans for a long time in China. This is the 13th five-year plan. It aligns well with GE’s policies and strategies. And those tend to be the genesis over time of more growth in China.”

Everyone has expected interest rates to go up

“I think everybody has expected interest rates to go up. We’re kind of counting on a stronger dollar world.”

Going to be targeting $1B in cost deflation next year by sourcing from lower cost countries

” we are really upping it a notch on deflation. We’re going to next year targeting about $1 billion of deflation. We are increasing our low cost country sourcing because that is an opportunity, in those economies is to get lower cost on source products. So that’s going to be a key lever that we play. ”

Additional industrial data will lead to productivity improvements

“When I talk about digital industrial, I really talk about it on three levels. I talk about it on the impact of smart machines, more sensors on machines across the board and with IT systems that integrate from GE through customers for the ecosystem. And the benefit of having more sensors and a better integration of IT systems is going to allow for more systems productivity, better productivity for us, better productivity for our customers, level one. Level two is as these sensors and systems generate more data, those data is going to be turn into applications, both hardware and software upgrades. This is going to go to our customers achieving what we call the power of 1%. If you can generate 1% fuel performance on GE’s installed base of jet engines that gives our customers $2 billion to $3 billion of profit every year. Small changes mean a lot. It’s all about the data.”

Wont be a super robust economy, but not a big macro slowdown either

“I certainly don’t think it’s going to be a super robust economy but we don’t see — when we look in orders and stuff like we don’t see a big macro slowdown.”

Internet of things adoption on industrial side will happen slower than on consumer

“this is going to happen slower than what happened on the consumer side, when you think about what happened on the consumer and this is going to be slower but there’s going to be opportunities for industrial companies to play there guys because the knowledge of the assets is more important than the knowledge of the systems”

3M 2016 Outlook Call Notes

Nick Gangestad

Lowering 2015 outlook

“Before I address the 2016 outlook, let me provide a few comments as we close out 2015. Global end-market demand continues to be soft, as reflected in declining macroeconomic forecast, a trend that has had a notable impact on our industrial business, particularly in the United States. We are also seeing weaker than expected demand in the consumer electronics market which is impacting our electronics and energy business. Therefore today, we’re updating guidance for the full year. We expect organic local currency growth to be approximately 1% versus prior guidance of 1.5% to 2%. As a result, we forecast full year GAAP earnings to be approximately $7.55 per share versus a prior range of $7.60 to $7.65.”

Seeing particular weakness in industrial businesses in the US

“As I said earlier, it does reflect the reality globally of what we’re seeing. We’re seeing particular weakness in industrial related businesses in the United States, and we’re also seeing weaker than expected demand in consumer electronics. For the quarter, we’re estimating organic growth in electronics and energy to be down high single-digits and we’re estimating industrial and safety and graphics to be down low single-digits. Our health care and consumer businesses were continuing to see good performance, Andrew.”

October, November, December has all been consistent with low to negative growth

“Fourth quarter last year, we were seeing quite a bit of activity in what we consider building inventory in the channel. We’re clearly not seeing that occurring now. I’m not ready to declare that we’re seeing necessarily channel inventory contracting more but it’s clearly not building. As far as quarterly trending of what we’re seeing so far, Nigel, there is no particular trend we’re seeing. What we’ve seen in October and November and what we’re estimating for December, it’s all a very consistent movement of the low to negative growth that we’re seeing in — the negative growth we’re seeing in industrial in the fourth quarter.”

Inge Thulin

There is growth in China

“I was recently in China, and I would say there’s of course growth. You have to prioritize and execute the plan. And I don’t think, generally speaking, that — you talked about the step change, I don’t know if it’s a step change. This is the second biggest economy in the world; there’s growth, generally speaking, specifically to what I would call domestic businesses; and by definition, our penetration is low. So, we should grow there, no doubt about it.”

There is a global slowdown in consumer electronics

“I think as Nick said, we see a slowdown, what I think is more of a global phenomenon in consumer electronics. And I think we all have seen some reports coming out lately that if you go the whole way from smartphones to tablets and TVs, there’s a small downturn in that in my view temporarily because we know that’s a cyclical business and they will come back again. ”

I don’t see anything to say that 2016 will be much much slower

“I will say that I don’t at this point in time see anything that is indicating for me that it will be much-much slower as we move into ‘16. So, I think what you see here is realistic based on the information that I have at hand at this point in time. I think that this change maybe as we indicated here is maybe on the consumer electronic part where you saw other indication coming out earlier this week or end of last week, where it looked like smartphones, tablets and even TVs in that space and I think also into semiconductor had slowed a little bit. But reality is those businesses go in a cycle and they will — they would turnaround again.”

Healthcare and consumer still growing

“You still see good growth in, generally speaking, in healthcare and consumer around the world. So, those domestic markets are growing well and we capitalize on that. So, health care is one of the highest growth rates for us going into next year with a highest margin that we say as well.”

The industrial slowdown is broad based

“I think it’s slowed and I will say — I will more categorize it maybe broad based versus saying there was one specific area that’s slowed more than the other. So, I think it was broad-based, generally speaking. And the industrial sector in United States has been going very well for quite some time. So, it’s — I would say, we’re slowing a little bit. So, it’s not a huge, someone falling off the cliff, it’s just that it’s slowing down a little bit. They’ve done very well in the big — one of the biggest sector in the United States economy. So, I think it’s broad-based.”