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Trimble Navigation CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: TRMB

Other mitigating effects included diversifying product line. For example, information management products while still generating relatively low revenue grew over 40% year-to-year. Our expectations for the field solution segment in the third quarter are shaped around drought related uncertainty and the affect in farm confidence and aggregate demand.

Given the forecast uncertainty we have established an outlook that is quite conservative against historical standards. At the same time we expect other elements of the segment to provide upsize which allow us to maintain an overall positive expectation. We also expect any drought effects to be of comparatively short duration without lasting effects on the farm economy and do not expect them to affect normal seasonal buying patterns as long as weather patterns assume a more normal patter later in the year.

The mobile solution segment continues to make a major contribution to the year-to-year improvement in Trimble quarterly results. Although the revenue increase continues to be dominated by the PeopleNet acquisition, we are seeing revenue and profitability contributions from other businesses within the segment as well.

Key to the improvement is the redirection of portfolio towards vertical markets which allow competitive differentiation, a higher value proposition and higher gross margins. Our third quarter mobile solutions outlook assumes continued workmanlike progression in the segment, combining revenue growth and significant year-over-year margin expansion. Short of a serious economic dislocation this segment should be more resistant to the effects of any macroeconomic recession scenario because decisions to make commercial plays more productive our long-term investment decisions, they are tend to be made independently of the economic cycle.

Looking forward to the next six months, we have no particularly original insight as to what may happen at the macroeconomic level worldwide, we are generally taking a conservative view and are selectively constraining costs. Our planning basically assumes the world remains is current muddling through status for some time with Europe on the sidelines and the U.S. producing relatively and it may grow up.

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