John Bean Technologies Corporation Q1 2010 Earnings Call Transcript
Demand for our freezing and protein processing product lines is improving. First quarter inbound increased year-over-year across all regions. Many of the orders were from non-poultry segments. As for the poultry segment, corn prices have declined recently while poultry prices firm up, which is positive for our customers' bottom line. We have begun discussion with some of our poultry customers regarding their capital requirements and anticipate a rebound in capital spending in the next six to nine months.
Overall, we are very pleased with the level of activity we are seeing for these product lines. However, due to weak demand in 2009, many of our competitors lowered prices on several projects to capture business. We have selectively responded and as a result, we did see some negative impact on our margins. With the economy improving and demand on the rebound, we believe this price pressure will ease.
Turning to the fruit processing product line, as we mentioned on our March call, 2009 drought conditions were the main contributor for this year's lower Florida citrus crop size. In fact, the freeze in January accelerated Florida fruit processing, which mitigated the negative impact for the first quarter. However, the lower Florida crop will impact our results for the next two quarters by an estimated $0.04 to $0.05 a share, as I previously mentioned in the March call.
Additionally, the tomato industry is going through a supply adjustment after record production in 2009. A 7% to 10% reduction in total processed tomato volume is projected for 2010. As a result, we anticipate the demand for tomato processing equipment to remain weak throughout the year. To respond to these lower volumes, we implemented further cost-reduction actions. For our in-container sterilization product line, demand is steady with a slight uptick in Europe.Lastly, our FoodTech aftermarket volume increased slightly in constant currencies. In summary, for 2010, we expect the FoodTech top line to grow modestly with year-over-year earnings growth, primarily due to the improved market conditions in Europe and North America for our freezing and protein processing product lines.Read the rest of this transcript for free on seekingalpha.com
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