Chip Blankenship: So yes, you’re exactly right, we were expecting more like $50 million in the first quarter and the customer has plans to meet the demand in their country for what they believe as a demand for more natural gas trucks versus diesel. And so, we responded as best we could to that increased demand. We did have some inventory available, but we did have to exercise our supply chain and assembly and test to get them — that material, and it wasn’t outperformance. The team did a fantastic job up and-down the line to deliver on that customer demand. So, as we sit here in the second quarter, we don’t have any further information to share other than we really think it’s going to be in the neighborhood of $50 million. And for the rest of the year, Bill, I don’t know how you want to describe that.
Bill Lacey: Yeah. Minimal amounts in the second half.
Pete Skibitski: Okay. And then just want to follow on the oil and gas up 2% in the quarter, is the outlook there kind of slowing substantially? Is the rest of the year in Industrial kind of dependant on the power gen side?
Chip Blankenship: So I did sort of tongue in cheek say that a week ago, I’d have been telling you that natural gas and — look, especially the natural gas side of oil and gas looks strong, because I had met with a couple of our different engine OEMs and they all said they were seeing strong investment, especially in the oil patch and fracking where natural gas was involved and companies were investing in additional new engines to get better output. But I just don’t know if that’s going to hold with this latest announcement from the administration that they’re putting a pause and really how that makes people feel about further investments and whether they’ll take all those engines they supposedly have on orders. So, I think it’s still early to tell on that side. It’s been steady for us, but not as high growth as the transportation and the power gen segments, but we’ll just have to see how this plays out.
Pete Skibitski: Understood. Thanks, guys.
Bill Lacey: Thanks, Pete.
Operator: Your next question comes from the line of Christopher Glynn from Oppenheimer. Please state your question.
Christopher Glynn: Thank you. Good afternoon. I was curious to hear the comment about guided weapons showed some growth in the quarter. Were you surprised by that? And do you expect the trend there?
Bill Lacey: Yeah, thanks for that question, Christopher. Not surprised by the growth. We have spoken that JDAM was going to get bottomed out. We have also had said that we have seen growth in the other areas, but it was kind of overcome by the decline in JDAM. So, we expect it to start seeing that growth and it did — and [we’re happy] (ph) to say that it came through.
Christopher Glynn: Okay. And is that looking fairly consistent dynamic there?
Bill Lacey: Currently, yes. We continue to be in conversations with our customers to see if there’s any new plans around guided weapons in JDAM. But to date, we sort of expect to see moderate growth in this area.
Christopher Glynn: Great.
Chip Blankenship: Yeah, I would say the conversations with the customers are ongoing as Bill said, and we keep getting questions about our capacity and ability to respond and we’ve worked with our suppliers as well to make sure they have capacity to respond, but there hasn’t been any follow-up regards to anything in addition to that.
Christopher Glynn: Great. Thanks for the additional color. I had a follow-up on Industrial. You called out the backup power demand. Just curious you’re seeing more of a secular growth dynamic. Anything interesting by applications or regions, or is it very broad based on the backup power side?
Chip Blankenship: It’s fairly broad-based, but in North America with the data centers as well as 5G and some of the large language model stuff coming through, we believe as our customers believe that that’s an opportunity for further growth and well under the future, and so we’re prepared to respond to that.
Christopher Glynn: Thank you very much.
Chip Blankenship: Yeah, you’re welcome.
Operator: Your next question comes from the line of Louis Raffetto from Wolfe Research. Please state your question.
Louis Raffetto: Hey, good evening. Thank you very much. Maybe just a follow-up on Matt’s earlier question, given the stronger 1Q, does the updated guide and some of that margin pressure you talked about, Bill, does that take into account higher variable comp now?
Bill Lacey: Yes, it does.
Louis Raffetto: Okay. Thank you. And then also, Bill, just stick with you. The other income was $20 million this quarter versus $8 million. Is that mostly equity interest in JV within Aero or is there anything else going on in there that flowed into the segment?
Bill Lacey: Yeah. We are seeing some strong JV performance.
Louis Raffetto: Okay. And then just last one, I think, Chip, you mentioned sort of the CapEx. Obviously, it spiked pretty high here in the quarter. Was anything to really note of and would you kind of settle down over the next few quarters given the reiteration?
Bill Lacey: We confirmed our $100 million guide. It was as we anticipated. And so, no, it’s as we expected.
Louis Raffetto: Okay, thank you.
Chip Blankenship: You’re welcome.
Operator: Your next question comes from the line of Gautam Khanna from TD Cowen. Please state your question.
Gautam Khanna: Hey, good afternoon guys.
