May 04, 2018 • 09:00 am ET

Previous

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

The floor is now open for questions. (Operator Instructions) Your first question comes from the line of Jeff Hammond of KeyBanc Capital Markets.

Analyst
Jeffrey Hammond

Hey. Good morning.

Executive
Denise L. Ramos

Good morning, Jeff.

Executive
Thomas M. Scalera

Good morning, Jeff.

Analyst
Jeffrey Hammond

Okay. So just on IP, I mean, it seems like still some puts and takes in some of the oil and gas markets. And I think you commented on project. Can you just -- with oil kind of pushing $70, can you just give us a little more feedback on maybe at least some of the short cycle business more meaningfully inflecting into the second half?

Executive
Thomas M. Scalera

Yeah. Jeff, I think, out of the gates, the oil and gas business, particularly on the project side, is still creating an overhang for us in both orders and revenue. Obviously, we had the large order last year. But what we're kind of encouraged by is, we have seen an increase in the funnel, particularly on oil and gas projects, primarily in the downstream and the midstream categories. So we do think there is been an increase in, kind of, project activity that's starting to build. We mentioned we had a $14 million order that just took place at the end of April. So we've had some good momentum, I would say, building on the project side. Again, that revenue for projects would be recognized when we ship those projects. So there is always some uncertainty in the timing of the projects, but we are seeing more activity.

On the short cycle in oil and gas, I would say it's been a little bit more mixed story. We did have probably a little bit of pressure in the quarter in some categories, like in Asia, we had some pressure in oil and gas baseline pump. So I would say we haven't seen a real new trend line on the short cycle side of oil and gas. We did have a strong year last year, but I would say that at this point, we would expect to see some improvements as the year goes on in the short cycle oil and gas, but it wasn't very strong so far in Q1.

Executive
Denise L. Ramos

With IP, when you think about the breakdown of the end markets, in IP, oil and gas is the one that we're watching very carefully, from both a project perspective and a short cycle perspective. Probably starting out the year a little bit lower than what we might have anticipated, what we really happy about, though, is when we see some of the other major markets that we're in, such as chemical, mining and even general industrial, pulp and paper in particular, that we're seeing some really nice projects in the funnel, and we expect to see some nice short cycle coming through in those areas also. So you sort of have the oil and gas as a challenge for us and these other markets that we're pretty excited about at this point.

Analyst
Jeffrey Hammond

Okay. And then on CCT, the growth in your overall