CIRCOR International, Inc. (NYSE:CIR) Q1 2018 Earnings Conference Call Transcript
May 02, 2018 • 09:00 am ET
Scott A. Buckhout
meets our customers' most demanding specifications.
Turning to Engineered Valves, orders were up sequentially and year-over-year, largely due to bookings related to the Johan Castberg FPSO project in the North Sea. Overall, the market remains challenging and pricing pressure is intense, but we continue to see a gradual increase in the number of quote requests. These requests follow the increase in project commitments we saw in 2017, especially for offshore FPSOs and Middle East projects. For the second quarter, we expect order levels to be generally consistent sequentially and we expect our order intake to further improve in the second half of the year.
Our Aerospace & Defense segment executed well in the first quarter and we expect order strength to continue as we move into Q2. Given the lumpy nature of orders in this segment, we saw an 11% decrease in orders on a pro forma combined basis, driven in large part by the Q1, 2017 order for the Joint Strike Fighter program. That order for 2018 is now expected in Q4.
In our Defense business, increased production on international and domestic fighter jet and submarine programs, along with a number of missile programs, continued to drive higher bookings. On the commercial front, order growth has been driven by increasing build rates for single-aisle aircraft, the growth of the A350 platform, and an active MRO pipeline. In addition, we're raising prices across the business as appropriate.
To summarize, we continue to see solid order momentum across most of our businesses and we're optimistic as we look ahead to Q2 and the second half of the year. Overall, we remain committed to driving long-term growth, generating strong free cash flow and de-levering the company by reducing debt and expanding margins.
Now, Rajeev and I will be happy to take your questions.