So, we are making that statement on this call here today. For the Communications segment, we have been able to, I’ll say improve the margins on a little bit lower revenue. We’re not committing that we’re going to be at 20% here yet which is the target margins for Communications at these revenue levels. This thing tick up, you should continue to see us in the high-teens from an operating margin perspective. And then Industrial, Industrial is right in the mid-teens and we would expect it to run in the mid-teens throughout the rest of this year. There’s a couple of things at play there. Obviously, the elongated destocking situation in our Industrial Equipment business which is not just the largest piece of that segment, but also most profitable piece, does have the impact and we’ve talked about that in the last couple of quarters.
And then we start layering in acquisitions that does have a dilutive impact. And the acquisitions are terrific opportunity for the growth of that business and opportunity that it presents for our stakeholders at the same time bringing the deal in generally comes in with diluted margins that we have to absorb and that’s no different than what the Schaffner acquisition that we bring into it. So when you add all that up, Wamsi, we feel good that as we move through the year our operating margins at the TE level will have an eighteen handle in front of it, plus or minus will be humming better than we did in 2023 and feel good about the opportunities to move forward from that as we continue our journey.
Sujal Shah: All right. Thank you, Wamsi. Can we have the next question, please?
Operator: Thank you. Our next question comes from the line of Amit Daryanani from Evercore. Please go ahead with your question.
Amit Daryanani: Thanks a lot. Good morning, everyone. I guess my question really is around there’s been a fair bit of worry around what end demand trends look like on a broader level. And I understand your commentary and what you’re seeing is very stable compared to a lot of the semiconductor companies I think right now. But I’m hoping you can talk and help us understand, orders in December quarter are down sequentially in aggregate has been flat for [CIS] (ph). Is that a concern that perhaps that second derivative is starting to shift negatively? I’d love to understand how do you think about orders being down sequentially versus your broader commentary that things are fairly stable? Thank you.
Terrence R. Curtin: Yes, sure, Amit. Thank you for the question and couple of things. First off being our orders were up in all the segments year-over-year by 4%. And I think you also not only have to look at orders, but we continue to have a backlog that’s about $6 billion. So, I think we’ve communicated pretty consistently. We expect as the environment gets better that backlog will work down. I’ll tell you we aren’t seeing cancellations. So, I know some of the semi companies talk about that, but we have to realize, our products are very different than semiconductors. Lead times are a lot shorter and really the element during COVID, was we couldn’t hit or lead times consistently we did not really extend lead times. So, when we look at the orders in the quarter like I said on the call they came in where we expected except for, Industrial Equipment was a little weaker.
Otherwise, they came in where we thought they would be coupling the orders with the backlog. And I think you can continue to expect, we’re probably going to backlog below one as the backlog continues to work down to get a little bit more normalized with service levels improving. I think from the backdrop when we think about Transportation. We do expect global auto production to come down from a little bit over 22 million units in the first quarter to 21 million units, and we think it will run at 21 million units for the year per quarter for the rest of this year to get to about 85 million units in total. In Industrial, you see sequential order increase which really is being driven by AD&M, Medical and Energy. So, you’re continuing to see that and that supports why we believe we’re going to have Industrial Solutions segment revenue increase.
And in Communications, what’s nice is we are seeing stability even though there are some pockets around enterprise applications, pure telecom applications. We aren’t seeing a slowdown in artificial intelligence and cloud, but there are some pockets out there in the telecom and the enterprise that are still working some things off, but it feels like there’s light at the end of that tunnel. So, I think the last thing is our guide for the second quarter is going up to $3.95 billion of revenue and it’s really based upon both the orders of $3.8 billion plus the backlog that we see. And I think we’ve laid out how we’re thinking about the world for the rest of the year.
Sujal Shah: Okay. Thank you, Amit. Can we have the next question, please?
Operator: Thank you. Our next question comes from the line of Christopher Glynn from Oppenheimer. Please go ahead with your question.
Christopher Glynn: Thank you. Good morning. I had a tuning question about some of the channels. So, with the Industrial Equipment organics pretty steep. You seem to reference just the channel partners, really they are curious if you could juxtapose the actual end market on that specifically. And then in auto, any excess inventories in certain regions of the world, so curious?
Terrence R. Curtin: Thanks, Chris and good morning. So, let’s break this apart because, yes, in the comments we do talk about destocking. We do not see destocking of our product in the automotive space at all. Our service levels are 90% plus on the ship to request, supply chain is flowing and honestly I think you see it in our results. So, in automotive we do not see destocking of our products. When you come to the destocking that we talk about and Chris you said it right, I think you have to think about TE’s world and there’s the world where we service our customers directly and then there’s the world that we use our distribution partners to cover where we can’t do directly. And in TE at the total company level, 80% of what we do, we cover directly.
