May 03, 2018 • 11:00 am ET

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Q & A
Executive
Jason VanWees

Thank you. (Operator Instructions) First, we have the line of Greg Konrad of Jefferies. Your line is open.

Analyst
Greg Konrad

Good morning.

Executive
Robert Mehrabian

Good morning, Greg.

Analyst
Greg Konrad

I mean, it seems like e2v has exceeded your expectations, and I mean, I know, at least how we're modeling it, exceeded our expectations too. Just -- so we get comparison, I mean, may be how much e2v grew last year, and then this year given we only had, I think, half a quarter of contribution a year ago. Just trying to think about what the organic growth on that business has been?

Executive
Robert Mehrabian

About -- I would say, Greg, about 7%, maybe a little more.

Analyst
Greg Konrad

7% last year or this quarter?

Executive
Robert Mehrabian

I would say on the 2017, and a little bit this year, a little more this year. It was contributed Greg about $88 million to our overall revenues, which is about 12.7% of the total in Q1.

Analyst
Greg Konrad

Makes sense. And then you just -- you listed your organic growth target, and I understand 8% is probably not going to be something you're going to do every quarter. But just when we think about the segments, how you expect organic growth to play out for the rest of the year?

Executive
Robert Mehrabian

Well, let me just go through that the best I can. I think, in the instruments segment, we had little shrinkage in marine in the first quarter. But I think, that would kind of work its way out, because we think it would be better going forward. So marine should be about 2.5%, and total instruments would be over 3%. Digital Imaging should stay over 7%, may be 7.3%. These are organic numbers, I am giving you. Aerospace and Defense, the defense part will increase, the aerospace part will probably shrink a little bit like it did in Q1, but it should be over 1%. Engineered Systems, relatively flat, may be up 1.5% with the total of about 4%. Greg, I would just preface this by saying, we're obviously a little cautious about our revenue and organic versus other growth, primarily because half of our portfolio is short-cycle businesses. And we can't predict what will happen to the various markets, but so far its worked for us pretty well.

Analyst
Greg Konrad

I appreciate that. And then, obviously, it was a great quarter. I mean, I guess, just last one for me. With the fiscal year '18 budget, I mean, you have a couple of development programs. But any insights kind of how the budget aligned to -- may be where you're focuses on defense? I'm just thinking about funding levels.

Executive
Robert Mehrabian

Yes. I think the budget has been really good for us. First, the budget overall grew about 10%, 10.2% to be precise. But where we've seen the most positive effect has been in our defense electronics. Our defense electronics grew about 31% year-over-year, of course, e2v contributed about 10.3% of that, over 7% of that. But that's been really good. We've grown in our microwave businesses, interconnect businesses, and as