Bill Sperry: Yeah, I mean, I think we’re really pleased generally with the pricing construct. We had about 1 point of wraparound price from our last year actions. So for us to garner 3 points in the first quarter implies success at getting some new price. And I would say generally, Tommy, while Electrical did very well in that regard, Utility did even better. And so across the enterprise, we think that pricing is in very good shape and I think we’re going to be quite surgical about it. And there may need to be instances in the enclosures area where we need to use price a little bit. But overall, net-net, as an enterprise, we feel quite good about overall pricing, and I think that’s a function of kind of the quality of the product, the quality of the relationships that we have, the positions that we have, but maybe most importantly, the relative service levels that we have and being able to supply our customers with the critical infrastructure solutions that they need.
So that’s been a very good story net-net, Tommy, for us.
Tommy Moll: Thank you, Bill. I’ll turn it back.
Operator: One moment for the next question. The next question comes from Julian Mitchell with Barclays. Your line is open.
Julian Mitchell: Hi, good morning.
Gerben Bakker: Hi, Julian.
Julian Mitchell: Hi. Jus — apologies, but wanted to circle back to telcom. Just to — I see the color on sort of Slide 8, and clearly that exposure was down 40% in the first quarter. But just to try and understand full year as a whole, kind of, what are you dialing in for that telcom business in terms of year-on-year trends in telcom?
Bill Sperry: We’re anticipating, Julian, double digits down for the full year. We see the second quarter kind of continuing from the first quarter. The comps in the second quarter get easier because this started as we went through the second half and accelerated as we went towards the end of the year. But yeah, our view right now is for it to be down double-digit. And we contemplated some of this in our — as we presented the guidance to you for that, that there’s some thoughts in the industry that we could see a second half rebound. We were a little perhaps more conservative in that view, and I think that’s proven out to be right.
Julian Mitchell: That’s helpful. Thank you. And then just my second question would be around Utility margins and the trajectory there. I understand that the pricing sounds pretty good there. And you’ve now got the Systems Control effect in that Q1 margin already. So as we’re thinking sort of the balance of the year in Utility margins, do we think about a sort of steady sequential increase through the year, and then you end up at that sort of flattish margin for the year as a whole?
Gerben Bakker: I think that’s the right way to think about it, indeed. And the only, I would say, clarification to that, typically in the fourth quarter, we’ll see it come down again. So you’ll see it go up second and third, down a little bit. But your construct over year-over-year for — particularly for that Utility T&D component is right.
Julian Mitchell: Great. Thank you.
Operator: One moment for the next question. The next question comes from Brett Linzey with Mizuho. Your line is now open.
Brett Linzey: Hello. Good morning, all.
Gerben Bakker: Good morning, Brett.
Brett Linzey: Yeah. Just wanted to come back to the investments. Can you just remind us in size what you’re thinking about in terms of investments for the year? And then what was spent in Q1? I’m just trying to think about the phasing first half, second half on some of the spending initiatives.
Bill Sperry: Yeah. So let’s characterize the investments maybe first, right? So some of it is in capacity expansion inside of the Utility segment. And that, as Gerben sort of highlighted, kind of focused in the transmission and substation area. On the electrical side, a little more around helping Mark get to his vision of getting that segment to compete collectively. So there’s some restructuring element in there. And as Gerben said, we’re kind of adding $0.10 to the annual outlook specifically for restructuring from $0.25 to $0.35. And so I think that you should see that reasonably ratably through the year, especially because some of the investment is depreciation from CapEx that was spent last year, right? So you see that come through ratably and the restructuring is based on when we can execute.
Gerben Bakker: And maybe the only thing to add there, that if you look sort of throughout year expense, I think, as you stated, what you’ll see, though, over year-over-year, is that that will start flattening as the year progresses because we accelerated the investment, particularly in the second half of the last year. So from that perspective, the comps just gets easier on that investment.
Brett Linzey: Okay. Great. And then just a quick follow up, Bill, in your prepared remarks, you noted something about a sequential 30 basis point pickup. Was that 1Q to 2Q? Just the context and what you meant there.
Bill Sperry: No, 4Q to 1Q is what I meant. So just when you saw the 1 point year-over-year decline, it also is a 30 basis point improvement from the fourth quarter. And so we actually think that’s a good sign.
Brett Linzey: Yeah. Okay. Makes sense. Thanks a lot.
Operator: One moment for the next question. The next question comes from Nicole DeBlase with Deutsche Bank. Your line is open.
Nicole DeBlase: Yeah. Thanks. Good morning, guys.
Gerben Bakker: Good morning, Nicole.
Nicole DeBlase: Just on the Electrical segment outlook just double-checking that organic. You guys are still thinking up 3 to 4 for the full year. And I guess in light of the outperformance in the first quarter, could this maybe be an area of upside? Thanks.
Bill Sperry: Yeah, I think you’ve got the outlook right and I think you also have that we were encouraged by the first quarter. So I think both of your statements, I agree with. Yeah.
Nicole DeBlase: Okay. Perfect. Thank you. And then secondly, on the meters and AMI business, you guys kind of put that additional color in the slides. Is your expectation that it actually declines year-on-year in the second half on the back of those tough comps or still up, but just not as much as the first half? Thank you.
Bill Sperry: Yeah, we were just, Nicole, trying to indicate a flattening there. So you saw pretty impressive growth in the first quarter. And as those comps get harder and we kind of managed through the backlog, we were expecting that to be a lot flatter.
Nicole DeBlase: Got it. Thanks. I’ll pass it on.
Operator: One moment for the next question. The next question comes from Christopher Glynn with Oppenheimer. Your line is open.
Christopher Glynn: Thanks. Good morning. Nicole just beat me to the punch on the Electrical question there, but going in a touch further, you talked about electrification driving broad-based strength across industrial markets. Can you talk a little bit about the kind of [Technical Difficulty] market? What type of electrification application are you associating with that?
Bill Sperry: Yeah. Look, there’s, I think, a lot of kind of background trends, Chris, going on. I think there’s some legitimate onshoring. I think there’s some legitimate, like electrification driving really big semiconductor plants, so big kind of construction and project work that’s being driven there. And for us, we called out specifically renewables as well as data centers, which are, I think, both outgrowths of what would fit under the electrification theme. And so broadly speaking, we think the industrial outlook is good. Onshoring, I would maybe call out as one of the more important trends and electrification really driving some of those verticals that our focus areas for us to serve those verticals. So that’s a good — I think that’s quite a good setup for us in the Electrical segment.
Christopher Glynn: Okay. Thanks. Just a little stale on the size of the renewables and the data center businesses, if you could help there?
Dan Innamorato: Yeah, it’s in the range of 5% to 10% each of the segment, Chris. Less than 10% each.
Christopher Glynn: Thanks, Dan.
Operator: One moment for the next question. The next question comes from Joe O’Dea with Wells Fargo. Your line is open.
Joe O’Dea: Hi, good morning.
Gerben Bakker: How are you, Joe?
Joe O’Dea: Hi. Doing well. Thanks. Just wanted to ask on telcom, and it sounds like challenged environment currently, but also constructive medium-term outlook. And so can you just parse a little bit the key developments that you need to see to transition from kind of current challenges into something that’s more constructive?
Gerben Bakker: [Technical Difficulty]
Bill Sperry: And I was just going to say that we saw the orders start to dip last year and it was coupled with a very large backlog. So we started liquidating that backlog. But watching the low orders suggest that once the backlog kind of got down to book and bill levels, that basically what we need, Joe, is the order pattern to pick back up. So this Enclosure segment serves telcom companies and cable companies. And when we talk to them, when we talk to our distributors who talk to them, when we talk to other suppliers who supply those kind of companies, there just continues to be a bullishness around the need for build out and infrastructure build out by those companies. And it’s — we need, basically, we just need the orders to pick back up, which we think is purely a function of when the inventory levels are — hit their normal levels.
I think ultimately as well, there’s going to be some stimulus money that starts to hit that segment and independent of probably will happen at exactly the same time that the stimulus will come and inventories will be down and all of a sudden the orders will bounce. But that’s basically what the business needs, is the customers to start placing orders in recognition that the end customer is installing and the inventories are at that normalized level.
Joe O’Dea: And so it sounds like it’s more of an inventory normalization headwind than it is an end market activity headwind. Is that fair?
Bill Sperry: We 100% believe that that’s true, yes.
Joe O’Dea: Yeah. Okay. And then just a question related to utility distribution side of things, and the degree to which you see any instances of long lead times in certain product categories, not necessarily what you ship, that are inhibiting some end market activity. And so the idea being that over time, is those correct? Could there actually be a bit of an uptick or sort of surge of demand as other channels sort of correct on lead times?
