Bill Sperry: Good morning.
Steve Tusa: Can you just maybe give me us an update on some of the absolute numbers embedded in the bridge for the year price cost and productivity or anything else that on the quarter maybe just this quarter just absolutes.
Bill Sperry: Well, let’s — so let’s start maybe with your first half, which was thinking about the bridge to the year. We had started in January thinking that there would be about two points of wraparound price. That’s obviously improved. And as Gerben said about half of our new sales guide is price. So that’s a step-up from a couple to more in the single-digit of absolute. And I think that’s a pretty big thing. As long as — it’s been interesting watching the cost curves where we basically we follow steel the most closely, Steve, and copper and aluminum have behaved a little bit like it where you saw a peaking back in the fall 2021 and a troughing at the end of 2022 and then a kind of reinflating now in the new year. And that’s kind of coming through now finally, as actual tailwind.
But it’s possible ultimately that that could — as we’re seeing inflation, that could kind of inflect a little bit. So, it’s easy for us to isolate price, little harder to nail down price cost because of that cost dynamic. But I think that’s the biggest, absolute piece that’s in there.
Steve Tusa: So, like I thought before, we had like a negative 90 of cost or something like that. I don’t know, where — if that was a number you guys put out there or not. But – so, are you saying that that’s like basically price cost or the cost side of that is, now like just basically modestly positive for the year?
Bill Sperry: It’s — we got it positive in Q1. The way we’re looking at it, we’re anticipating a reasonably flat and benign contribution, from the cost. So, it makes the price a little more drop-through rather than being absorbed. Now, you still have other inflation obviously, in nonmaterial places like wages and things like that. But the material and pricing equation has really improved, quite a bit.
Steve Tusa: Your understatements are legendary, at this stage a little more I think, it’s a little more than a little more. But the last question, just on the electrical volumes. Were they down like high singles year-over-year, in the quarter? And I guess, that’s obviously, not all resi. What else would have been down to drag that down, or maybe it, was all resi.
Bill Sperry: No. Resi – yes, your calculation is right, resi at double digits and being the percentage of the segment that it is, represents a couple of points plus of that. But that still leaves others. And so there was spots inside the commercial business Steve, where we started to reduce our lead times. And we started to see our customers managing their inventory. And kind of that sort of relates to I think Jeff’s first question, right, where as the customer gets their inventory normalized, is there a period where you see maybe an underordering of a couple of weeks that affects things. And I think, that’s what we saw in some of our commercial businesses.
Steve Tusa: Makes sense. Okay. Thanks.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Tommy Moll from Stephens. Your question, please.
Tommy Moll: Good morning and thanks for taking my question.
Bill Sperry: Good morning, Tommy
Tommy Moll: I wanted to start on your revised revenue outlook, so up several hundred basis points from when we spoke last quarter. If we look at it by segment, last quarter the call on the utility side was for mid-singles plus, for the year and on the electrical side, low singles both on an organic basis. You well exceeded that on the utility side and came in light on the electrical side, at least for the first quarter. So could you just refresh us on, what the full year framework is like on either side of your business?
Bill Sperry: Yes, we’ve been quite careful to not reparse this framework into the two segments. But between them, we’re thinking that volumes can be mid-singles. And I think that will be, obviously, skewed towards utility being the heavy contributor there.
Tommy Moll: Okay. May get a similar answer here, but I’ll try anyway. Just specifically for your non-res exposure in electrical, if volumes there were down in the first quarter, it sounds like there’s incrementally more caution in the second half of this year. So my assumption would be that your base case is for the volumes there to trend pretty consistently negative through the year. But if you could just comment there and also, just anything that’s changed versus last quarter.
Bill Sperry: Yes. We’re not — I’d say, let me just restate a couple of things. One is, I don’t think we are increasingly cautious on the second half. I don’t think we have that. Secondly, I think that one of the interesting elements of seeing the electrical contract a little bit in Q1 is a function of the fact that they grew quite dramatically in the first quarter 2022. And their sequential ramp up from the fourth quarter, which, as I said, typically comes down, was up significantly last year. So we had this really hard compare, Tommy. And so, to answer your question, to me, it starts to get a little more reliant on sequential analysis and the fact that, we were flat from 4Q to 1Q suggests to me some favorability. But as the compare won’t be as hard as we go forward. So, I think, that informs sort of our outlook. But I wouldn’t say we’ve increased our caution in the second half.
Gerben Bakker: And maybe adding to that a little bit, just to give you some insight into the complexities that we’re working through and the thought process that we are — for this, as supply chain normalizes again and we’re now seeing that in parts of our business, specifically in some of the non-res businesses, you’re really dealing with a couple of things. One is, just by the fact that lead times coming down should allow customers to not place orders for a little while and then place them again. The second component that’s going on at the same time is, when these lead times are coming down, the supply chain becomes more predictable. Customers and distributors don’t need to have the inventory levels that they needed when there was a lot of uncertainty.
So at the same time, we’re seeing some of the inventories coming down. And managing both those dynamics is what creates some challenges for us to fully understand at what level is each distributor doing this; some are, some aren’t. Are they really following the lead times down, or are they still nervous and placing out? So there’s a lot of complexities in it, which is why we’re taking a more cautious approach, kind of, going into the second half for these dynamics.
Tommy Moll: I appreciate it and I’ll turn it back. Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Josh Pokrzywinski from Morgan Stanley. Your question, please.
Josh Pokrzywinski: Hi. Good morning, guys.
Gerben Bakker: Good morning, Josh.
