Joseph Ritchie: Okay. Great. That’s helpful. And then look, big focus this quarter on mega projects, timing of orders. Just, Jenny, maybe just talk a little bit about how you see things kind of playing out with all the investment that’s happening in the U.S. Do you think Parker is well positioned to see an inflection in orders when you start to see a lot more equipment and the stuff that’s going inside of factory come through?
Jennifer Parmentier: Absolutely. I mean, when you think about, as I mentioned earlier, the underinvestment that’s happened in the last decade and what will happen a decade, I mean, we are in a great position to participate. We’ve said a couple of times, it’s still early days. But in speaking with some of our channel partners, where there’s some factories going in for semicon and some of these other big projects, they’re starting to participate in that. We’ve said we’re there when the land is prepped, when the walls go up and when the equipment goes inside the factory. And some of our distributors have been able to talk to us about how they’re already enjoying that business. So we’re in a really good position with those as well as the secular trends that I mentioned earlier.
Operator: Our next question comes from Mig Dobre with Baird.
Mircea Dobre: Congratulations, Lee, and all the best to you going forward. My question, going back to the industrial backlog discussion, I’m sort of curious as to how you think about this elevated level of backlog. Is this sort of a function of a change in the way your customers are ordering? Or is this more of a function of really what we’ve been going through over the past couple of years with supply chains and so on and so forth and safety stock being built up?
Jennifer Parmentier: Mig, this is Jenny. I think it’s all the things you mentioned. But as Lee just stated, with the acquisitions that we’ve made, we’re getting longer cycle business here. So we see a longer demand sense, a longer demand horizon than we’ve seen in the past. So the transformation of the portfolio is definitely impacting the backlog. And I do think that what we’ve been through the last couple of years, of course, you’re going to see some people just kind of sharpening their pencils on how they order and making sure that they have the right lead times out there. So I think that’s part of it. But more of it is really about the shift of our portfolio. I’ve said many times, we know from the past that backlog isn’t bulletproof.
But we’ve seen this now for the last several quarters in a declining order environment. In North America, orders have been negative for quarters, but this backlog has remained resilient. And we believe that while it might go down a little bit, our portfolio is going to drive us to have this kind of backlog going forward.
Mircea Dobre: Right. Understood. My follow-up is on aero. Can you be a little more specific on that contractual settlement and the benefit in the quarter? And then in terms of the guidance raise, talk a little bit maybe about that as well, the organic as well as the market. I mean, is this a function of aftermarket really driving that guidance raise? Or is there something else in there?
Todd Leombruno: Mig, this is Todd. On the guidance raise, you obviously can see the orders. Activity across all of those platforms has been extremely strong. Aftermarket was a big standout in the quarter. That was a big driver of the growth, and it was a big driver of the margin performance. So we just feel a little bit more confident with another quarter in there that we feel that we’re able to raise that. So we moved to 200 basis points from 8 to 10 for the full year, and we feel pretty confident about that. I don’t want to make a big deal about those things. I said they were small and minor, those onetime items. I just wanted to call it out so that it would make a little bit more sense if you look at our margin guide going forward for the rest of the year. So it’s little of that.
Jennifer Parmentier: And just a little more color on aerospace. Like Todd said, very strong aftermarket, commercial and military. And if we look forward in this guidance, we’ve said it a couple of times already, but just to look at each 4 of these — each of these areas, commercial OEM is in the mid-teens. And those narrow-body rate increases, they’ve happened, and we see that they’re going to continue to do so. Commercial MRO is in the mid-teens. The narrow-body aircraft are almost at pre-pandemic levels. There’s a lot of engine repair and component restocking going on. So very positive there. And then military OEM, mid-single-digit as demand for legacy programs continue. And then military MRO, mid- to high single digit. Near term, we have tailwind with some of our Department of Defense repair depots.
We continue to really enjoy public-private partnerships. They’re growing. And there’s fleet [indiscernible] and service extension. So just all in all, just a great environment across all 4 of these areas.
Operator: And our next question comes from David Raso with Evercore ISI.
David Raso: Obviously, congratulations, Lee. Best of luck. When it comes to the North American orders, just given 2 quarters ago, right, down 8, now some second derivative improvement we just saw. Given the comps are starting to ease, I’m just curious if you’d be willing to say, do you think we’ve seen the bottom in the year-over-year orders in North America? And then I have a question about the organic sales cadence. Can you just update us on how we get from here to the full year 1.5? And I’m particularly interested also what do you have for organic in Europe in the guide.
Jennifer Parmentier: David, this is Jenny. I don’t think any of us really have that good of a crystal ball. But I will restate that the backlog is strong. And as you said, orders were at negative 8, and they went to negative 4. So we feel good about that. There’s some uncertainty out there. And all in all, if you look at North America, we have the first half slightly lower at about 1%, but full year, mostly unchanged, it’s slightly positive. So I can’t give you an exact answer on that, but we feel good about where we’re at right now.
