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Fortive Corporation  (NYSE:FTV)
Q3 2018 Earnings Conference Call
Oct. 25, 2018, 5:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

My name is Brandon and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to the Fortive Corporation's Third Quarter 2018 Earnings Results Conference Call. (Operator Instructions)

I would now like to turn the call over to Ms. Lisa Curran, Vice President of Investor Relations. Ms. Curran, you may begin your conference.

Lisa Curran -- Vice President of Investor Relations

Thank you, Brandon. Good afternoon, everyone and thank you for joining us on the call. With me today are Jim Lico, our President and Chief Executive Officer and Chuck McLaughlin, our Senior Vice President and Chief Financial Officer.

We present certain non-GAAP financial measures on today's call. Information required by SEC Regulation G relating to these non-GAAP financial measures are available on the Investors section of our website, www.fortive.com, under the heading Financial Information. A replay of the webcast will be archived on the Investors section of our website later today under the heading Events & Presentations and will remain archived until our next quarterly call. A replay of the conference call will be available shortly after the conclusion of this call until Friday, November 9, 2018. Instructions for accessing this replay are included in our third quarter 2018 earnings press release.

During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. All references to period-to-period increases or decreases in financial metrics are year-over-year. During the call, we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future.

These forward-looking statements are subject to a number of risks and uncertainties and actual results might differ materially from any forward-looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2017. These forward-looking statements speak only as of the date they are made and we do not assume any obligation to update any forward-looking statements.

Jim?

Jim Lico -- President and Chief Executive Officer

Thanks, Lisa and good afternoon, everyone. Today we reported strong high-teens adjusted earnings growth for the third quarter, reflecting the underlying strength of our core portfolio, the power of the Florida business system and the increasing momentum of our M&A flywheel. Given our strong free cash flow generation and a healthy balance sheet, we are in an advantage position to continue driving organic growth while pursuing acquisitions to accelerate achievement -- the achievement of our strategy.

During the third quarter, we closed the $775 million acquisition of Gordian and the $2 billion acquisition of Accruent. Through the application of FBS, we were also able to close the divestiture of the Automation and Specialty businesses to Ultra well ahead of schedule on October 1. In total, we have now announced $8.2 billion of transactions in 2018, $5.5 billion of which have already been closed. We have done so while maintaining our commitment to a strong balance sheet based on our consistent free cash flow performance as well as the successful execution of our mandatory convertible preferred stock offering in the second quarter. Taken together, these transactions significantly advance our portfolio enhancement efforts aimed at increasing growth and reducing cyclicality across the portfolio.

The Gordian and Accruent acquisitions provide entry into attractive markets characterized by strong long-term growth trends and limited cyclicality. They also represent the continued execution of our digital strategy to address a range of critical software enabled workflows for our customers through the acquisition of quality software assets with high margins and significant recurring revenue.

During the quarter, we also continued to make progress toward the closing of the previously announced acquisition of Advanced Sterilization Products. Based on close collaboration with our partners at Johnson & Johnson and our continued application of FBS, we successfully completed the requisite European Works Council consultations and cleared key regulatory hurdles, paving the way for the formal acceptance of our binding offer on September 20. We continue to expect to close the transaction in early 2019.

The third quarter represented the opportunity to demonstrate all that is special about the Fortive team as we responded to hurricane Florence and other recent natural disasters around the world and showed our commitment to our local communities through our annual day of carrying. Over the past two weeks, our employees participated in hundreds of events including working with food banks, improving children's shelters and building houses for the low income and homeless. Coming together to support our communities has never been more important for the long-term success of our Company and the communities in which we work.

With that I'd like to turn to the details of the quarter. Adjusted net earnings of $321.1 million were up 18.2% over the prior year. Adjusted diluted net earnings per share were $0.86 based on an adjusted effective tax rate of 17.2% for the quarter. Sales grew 9.2% to $1.8 billion, reflecting a core revenue increase of 3.2% driven by strong growth across Industrial Technologies as well as Fluke Industrial Scientific and Gems. Acquisitions including Gordian and Accruent contributed 720 basis points top line growth.

Geographically, high-growth markets' core revenue grew mid-single digits with continued strength in Asia and Latin America. This growth was led by Gilbarco Veeder-Root Sensing Technologies and Automation. Despite certain parts of the China market that are becoming more challenging, we performed well, generating high single-digit growth for the quarter. Developed markets' core revenue grew low-single digits reflecting continued strength in North America. Core revenue growth in North America was mid-single digits and was driven by strong performance at Fluke, Matco, Industrial Scientific and Jacobs Vehicle Systems. Western Europe declined low-single digits as high-single digit growth at Tektronix was offset by continued weakness at Qualitrol and JVS.

In the third quarter, we posted a gross margin of 50.2%, reflecting 40 basis points of expansion over the prior year based on the strong contribution from our recent acquisitions, which was partially offset by anticipated impact of tariffs and inflationary pressures. The third quarter represented our fourth consecutive quarter of gross margins at or above 50%. Pricing contributed 60 basis points with four of our six platforms delivering positive price during the quarter.

Operating profit margin was 17.5% with core operating margins decreasing 25 basis points as strong PPV and productivity were more than offset by cost associated with lost production days at Gilbarco Veeder-Root due to Hurricane Florence, as well as unfavorable mix dynamics within the portfolio. During the third quarter, we generated $351.8 million of free cash flow, representing a 23% year-over-year increase and a free cash flow conversion ratio of 143%. For the full year, we are on track to deliver a free cash flow conversion ratio of greater than 110%.

Turning to our segments. Professional Instrumentation posted sales growth of 13.6% including core revenue growth of 1.4%. Acquisitions contributed 3,120 basis points, while unfavorable currency reduced growth by 100 basis points. Reported operating margin of 20.1% reflected 270 basis points of dilutive operating margin associated with acquisitions and transaction expenses. Core margins were flat due to the impact of tariffs at Fluke and Tektronix, inflationary pressures and customer-related delays at EMC. Advanced Instrumentation and Solutions core revenue increased low single digits during the quarter, driven by continued outperformance of Fluke at Industrial Scientific.

Field Solutions' core revenue grew low-single digits reflecting mid-single digit growth in developed markets offset by some slowing in high growth markets, which were slightly up in the quarter. Fluke delivered mid single-digit core growth led by double-digit growth at Fluke Digital Systems and Fluke Health Solutions and high single-digit growth in the Fluke Industrial Group and Fluke Calibration. We are pleased with the progress we made in the quarter to counteract the impact of tariffs through FBS and supply chains strategies and expect to be fully counter measured by the first quarter of 2019.

At Fluke Digital Systems, we've recently released the Fluke -- the new Fluke 3561 vibration sensor, which has generated a very positive response from the market based on the pace of orders thus far, driving continued customer expansion including a large order from Martinrea. Annual recurring revenue from (inaudible) grew greater than 20% as growth investments in sales and marketing and the compelling value proposition of Fluke's combine hardware and software product offering continue to drive our performance in market share gains.

Industrial Scientific delivered mid-teens revenue growth led by continued double-digit growth for iNet. The ISC team's ongoing implementation of the Fortive Business System is continue to highlight opportunities to drive significant revenue growth and margin expansion in the coming quarters. ISC recently launched the RGX gateway, a ruggedized gateway device that transmits worker location, gas readings and real time alerts from connected devices to the iNet Now platform, simplifying the process of delivering live monitoring data to the cloud for a variety of critical industrial applications.

Qualitrol core sales declined high teens, reflecting lower sales in China, Europe and the Middle East. This represents a continuation of the market softness that we messaged in prior quarters and which we expect to remain a headwind into 2019.

Product realization platform core revenues declined slightly for the quarter led by a low single-digit decline at Tektronix. EMC registered mid single-digit growth despite customer related delays in North America, which we expect to reverse in the fourth quarter. The product realization platform registered a book to bill ratio greater than 1 for the quarter reflecting solid order momentum heading into the fourth quarter.

Turning to Tektronix. Excluding the large 3D sensor order we highlighted previously, core revenue growth was low single-digits. Results were driven by strong growth in Western Europe and China, offset by a decline in North America, primarily reflecting delays with U.S. defense contractors. Tax industrial and automotive end markets continued to deliver double-digit growth reflecting the strong momentum created by the 5 Series and the recently introduced 6 Series Mixed Signal Oscilloscopes.

We were encouraged by positive order growth in the quarter, including a strong double-digit increase in orders for the 5 Series and key new customer wins for the 6 series from Smith & Nephew and a Fortune 100 Internet technology company. Our sensing technologies platform was up slightly in the quarter led by high single-digit core revenue growth of Gems, which included a large order from a leading manufacturer of heavy-duty buses in the US. Core revenue declined low-single digits in North America, reflecting headwinds due to Hurricane Florence and difficult comparables related to a large project for the Naval Sea Systems Command from the prior year. Double-digit core revenue growth in China more than offset the results in North America.

Moving to our Industrial Technology segment. Revenue grew 5.3%, including core revenue growth of 4.8%. Acquisitions contributed 200 basis points of growth, while unfavorable currency movements reduced growth by 150 basis points. Reported operating margin of 21.1% reflecting a core operating margin declined 40 basis points, driven by increased material costs due to inflationary pressure and tariffs as well as 40 basis points of dilutive operating margin associated with the Orpak acquisitions.

Our transportation technologies platform core revenue grew mid-single digits, led by strong double-digit growth in high growth markets. Gilbarco Veeder-Root delivered low single-digit core revenue growth driven by mid-teens increasing, high growth markets. GVR generated low single-digit growth in North America, reflecting the negative impact from Hurricane Florence.

Continued strong double-digit core growth in China was led by demand in Veeder-Root for submersible pumps and automatic tank gauges related to double wall tank upgrades. As anticipated, we continue to see a pickup in EMV sales at Gilbarco, particularly with mid tier accounts in single site owners and expect this trend to accelerate in the fourth quarter, reflecting a strong North American order book.

During the third quarter, GVR also made a minority investment in TRITIUM, a leading manufacturing of fast-charging solutions for electric vehicles, providing an early entry into the EV market. GVR had a very successful showing at the recent iNix conference highlighted by a positive reception to the TRITIUM announcement as well as the number of new product launches such as GVR's new passport edge, tablet based point of sales solution.

Teletrac and Navman grew mid-single digits, led by double-digit core growth in Asia-Pacific at mid-single digits in Western Europe. In North America, we've continued to experience ELD implementation challenges causing accelerated customer churn. Due to the recurring revenue nature of the business, changes to the North American installed base will continue to have an unfavorable impact on Teletrac Navman's performance into 2019.

Automation and Specialty posted high-single digit core revenue growth for the quarter led by high single-digit increases in both North America and Western Europe. JVS delivered mid single-digit core revenue growth driven by increased Class A truck production in the US. Results in our automation business were led by Kollmorgen where high single-digit core revenue growth continue to be driven by strong double-digit growth in Robotics. This strong performance was also driven by automations focused on high-growth markets led by double-digit growth in China. We wish our entire ANS team all the best as they join the ultra team in the fourth quarter.

Moving to franchise distribution, the platform grew core revenue mid-single digits, Matco returned to mid-single digit growth reflecting mid-teens growth in hard-line and high single-digit growth in both tool storage and power tools, driven by new product launches and market share gains. Matco recently launched Maximus 3.0, a unique full featured diagnostic scan tool, which automatically links to vehicle make, model and your information and provides diagnostic reporting to a proprietary subscription based automotive repair database called Maximus Fix. Maximus 6. Maximus 3.80 is expected to be a key drug growth driver in the coming quarters, while Maximus fix provides the diagnostic platform with a meaningful new recurring revenue opportunity.

To wrap up, during the third quarter, we delivered double-digit adjusted earnings-per-share growth and strong free cash flow despite some headwinds associated with Hurricane Florence and tariffs. We also made significant progress in our long-term portfolio transformation efforts, positioning Fortive end markets with faster top line growth, reduced cyclicality and enhanced opportunities to grow recurring revenue. Throughout the year, we have continued to generate strong core operating results consistent with the Fortive formula, driving year-to-date adjusted earnings growth of 23% and a 29% increase of free cash flow while also implementing a number of complex capital allocation strategies. With the power of the Fortive Business System and the demonstrated momentum of our acquisition flywheel, we will continue to enhance all aspects of our portfolio and our drive to deliver sustained top quality earnings growth.

Turning to the guide. W are updating our full year 2018 adjusted diluted net EPS guidance to $2.98 to $3.02 on a continuing operations basis, which excludes the 2018 results of the divested and ANS business. The guide assumes approximately 4% core revenue growth, core operating margin expansion of approximately 50 basis points and effective tax rate of 17.2% and a free cash flow conversion ratio of greater than 110% for the year, excluding the impact of the gain from the divestiture of the ANS business. The updated adjusted diluted net EPS guidance also reflects the dilutive impact from the preferred stock offering on an if converted basis.

We are also initiating our fourth quarter adjusted diluted net EPS guidance of $0.83 to $0.87, which includes assumptions of 5% to 6% core revenue growth.,core operating margin expansion of 75 to a 100 basis points and an effective tax rate of 17.5%.

Before moving to questions, we wanted to provide an early view on 2019, given the extensive portfolio transformation and complex capital transactions which we successfully executed in 2018. We expect closed acquisitions to collectively contribute $0.20 to $0.25 of earnings per share, reflecting the addition of high-margin, high growth software assets. Our enhanced portfolio profile of greater than 30% recurring revenue should generate strong annuity free cash flows with gross margins exceeding 50%.

The fundamentals of our core portfolio remain strong, particularly in North America with EMV continuing to ramp. While we monitor conditions in China and pockets of Europe and the Middle East, through solid execution in the application of the business system, we expect to fully offset the unfavorable impact from announced tariffs.

Assuming a stable macro environment., our remaining preliminary modeling assumptions include approximately 50 basis points of core operating margin expansion, free cash flow conversion ratio of greater than 115% and an effective tax rate in the high teens. We anticipate deleveraging quickly after the closing of ASP, enabling us to maintain our investment grade rating. And lastly, we plan to offset and at stranded costs of $0.01 to $0.02 of earnings per share with the savings generated by our 2018 restructuring efforts.

In summary, it is our expectation to deliver another year of double-digit adjusted earnings growth in 2019. And with that, I'd like to turn it over to Lisa.

Lisa Curran -- Vice President of Investor Relations

Thank you, Jim. That concludes our formal comments. Brandon, we are now ready for questions.

Questions and Answers:

Operator

(Operator Instructions) And your first question comes from the line of Julian Mitchell from Barclays.

Julian Mitchell -- Barclays -- Analyst

Hi, good afternoon. Maybe if you could just start by helping us understand why the core sales growth accelerates quickly in 4Q, I think you said 5% to 6% after just doing around 3%. So what are the biggest two or three moving pieces that get you there?

Jim Lico -- President and Chief Executive Officer

Yes. Julian, it's Jim. Thanks. Well, I think first and foremost, we, as you know from a few months ago, we said, we thought that we'd be in the sort of 4% range for the second half, mid-single digit range in the second half and really this is just playing out with a slightly different cadence, some of the backlog that we've talked about with the hurricane pushed into the fourth quarter, so we built backlog at Fluke, not only Gilbarco, we also built backlog Tech and Fluke. So, we're walking into a good backlog situation, we talked about some of the orders at EMC as well that moved into the fourth. So, we've got a movement, but it's really no change really to how we sort of see the macro or see the revenue, it's just a slightly different cadence between the third quarter and the fourth quarter.

Julian Mitchell -- Barclays -- Analyst

Understood, thank you. And then my second question would just be around the earnings sort of base and coupling that $3 base, you gave for 2018 with the initial comments on 2019. So just to be clear, is the right way to think about it, you have the $3 base, high single-digit core EBIT growth from that $0.25 from closed deals, $0.30 for ASP and so if we round all of that together, we get up to sort of 380-ish or show something for the next year, is that a good sort of template?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Hey, Julian. This is Chuck. That's directionally correct. The one thing that obviously isn't closed is ASP but and I think that's consistent with what we've said before, so it depends a little bit on the timing of that. But everything else, I agree with.

Julian Mitchell -- Barclays -- Analyst

Great. Thank you.

Jim Lico -- President and Chief Executive Officer

Thank you. Julian.

Operator

And your next question comes from Andrew Obin from Bank of America.

Andrew Obin -- Bank of America -- Analyst

Hi, guys. Good afternoon. Can you hear me?

Jim Lico -- President and Chief Executive Officer

Yeah, we can, Andrew.

Andrew Obin -- Bank of America -- Analyst

Okay. So just a little bit more color on what happened in Tektronix, I know you highlighted Keithley, but maybe give a sense of what's happening by geography, outside of Keithley, we've been getting a lot of questions on Chinese SMEs, that seems to be OK but whatever color you can give within Tektronix would be greatly appreciated?.

Jim Lico -- President and Chief Executive Officer

Yes, sure. So as we said, if we're sort of (inaudible) this 3D sensing discussion with the end of the third quarter, but that had a little bit obvious impact in it. Really, as we said in the prepared remarks, Western Europe was pretty good for Tek, in particular, one of the highlights of our in Europe for all of Fortive. And China remains good in the mid-single digit range, So and really the semiconductor side of that was pretty good. So we felt pretty good about the quarter in that realm. Really, if you will, the decline, a little bit of decline in the quarter was really due to North America that was some little bit of slowness combined with some orders that moved into the fourth. So we think, we'll improve that, we know we'll improve that number in the fourth quarter and -- our, right now from what we're seeing, the headline -- look away from the headlines, but what we're actually seeing in China from an orders perspective is the continuation of the business in China with growth of Tektronix and we're certainly watching all the things that you all watch to see if the headlines become reality, but at this point right now the order book looks pretty good for the fourth quarter for China for Tektronix.

Andrew Obin -- Bank of America -- Analyst

And then just a follow-up, you sort of highlighted Fluke Digital doing well, seems to have accelerated recently, you did bring up some new products. But in a big-picture, what has changed to accelerate growth in that business?

Jim Lico -- President and Chief Executive Officer

Well, I think it's a, yes, it's a great question. First, I think we're starting to see some of the hardware sales that took a little bit longer. We talked about that, the vibe sensor that we launched this quarter, really a great product, a 3-year life, real ease of use, really gets to a real core modality of challenge for condition monitoring. So the hardware, really the killer hardware solution comes out with, as we've said (inaudible) been a good double-digit grower for some -- for really since we bought the business, so we're getting scale in that regard as well. So it's not -- I think we added 131 customers in the quarter as well, so the addition of new customers plus up selling to current customers and with the hardware coming along is starting to create just some really nice tailwinds for the business.

Andrew Kaplowitz -- Citi -- Analyst

Thank you very much.

Jim Lico -- President and Chief Executive Officer

Thanks, Andrew.

Operator

And your next question comes from Steven Winoker from UBS.

Steven Winoker -- UBS -- Analyst

Hey thanks and good afternoon.

Jim Lico -- President and Chief Executive Officer

Hey, Steve.

Steven Winoker -- UBS -- Analyst

Hey Jim. Just, I know you hit it a couple of times, but just in good kind of FBS fashion, could you maybe give us a better sense on that why behind that simple comment you had around backlog getting pushed sequentially to Q4? When you dig into all the little pieces of what is driving this, I know you're saying it's not macro related, but what are kind of the whys behind some of that to give us confidence, like we would worry with some other companies that they may not actually see that push or get another quarter after that.

Jim Lico -- President and Chief Executive Officer

Yes, thanks for the opportunity. Clearly, one of things we saw with the cadence at GVR was that it was slightly back-end loaded quarter and then the hurricane kind of came at a time when a lot of our employees had to deal with the issues at home and things like that. And so we lost a number of production days, which not only pushed revenue into the fourth quarter but also cost us some of the cost side as well. So it was a headwind from a cost side as we put in premium freight and some of those things in order to protect the customers we could. But it really -- it was really maybe a less linear quarter than we thought, a lot of our small net -- the nice thing about the small network owners was, a number of them showed up in the quarter that maybe the downside to that is they showed up later in the quarter. So that really pushes the big chunk of the backlog into the -- that we saw into the fourth quarter. The other places where we built backlog really we're just a -- large orders, some of them were at customer situations, everyone has its story, but I think as we went -- as Chuck and I went through, all the forecast we felt pretty good about a lot of it wasn't necessarily past due backlog, but rather backlog that was just going to be due. So combination of some orders getting delayed, some customers pushing things out was really the answer. Now we're almost done with the quarter -- the month right now for us and most of those orders have already revenue. So we feel good about the fact that those are now some of the improvements that we've had. And as we mentioned in the prepared remarks, some of these government orders were really just took longer than we thought. And like I said, some of them have already been revenued.

Steven Winoker -- UBS -- Analyst

Okay, that's great color. And then, I'd like to just shift gears to Tritium. That investment on -- that you've announced at the October 8, and mentioned just earlier in this call that seems to me like it could be rather significant move for Gilbarco Veeder-Root over a time. Could you maybe just expand a little bit on that in terms of how that sort of -- that affects your thinking about the footprint and utilizing the footprint over the long term?

Jim Lico -- President and Chief Executive Officer

Yes, Steve, we're really excited about it. It's a prudent way to make an investment here that allows for us to sort of have the technology we need. We've got a great footprint as you know around the world with gas station owners and we'll really -- as we are starting to talk to large scale network owners, they're wanting to -- they're starting to think about an EV solution that needs to be fast-charging obviously because in a gas station, it's not going to be something slow. So, this fast-charging technology that we've got that's IP protected is really a great advantage for us and we can globalize that business with a partner like Tritium. So, in the US, that's going to be mostly large network owners, in Europe, it's going to be a little bit different. It will be some of the oil and gas folks, it will be some utilities and so we'll have some slightly different partners as well to expand the business. So, and we do -- so I think we're really excited about what we can do to help them globalize the business with that technology. We do have a right to purchase the company as well. So, if things play out the way, hopefully we all think and depending on timing, I think that's what I mean by prudent. We don't know necessarily the timing of electric vehicles and how long it will take for there to be meaningful investment with some of our customers, but we're getting to work, as I mentioned at the National Association of Convenience Stores trade show, we had a few weeks ago, we launched this where we made the announcement and we had a lot of large-scale customers who are pretty excited about the offering.

Steven Winoker -- UBS -- Analyst

Great, thanks.

Jim Lico -- President and Chief Executive Officer

Have a great day.

Operator

And your next question comes from Scott Davis from Melius Research.

Scott Davis -- Melius Research -- Analyst

Hi, good afternoon guys.

Jim Lico -- President and Chief Executive Officer

Hey Scott.

Scott Davis -- Melius Research -- Analyst

Trying to get my arms around a couple of things, the quarters when you have these big spin-offs are always a little hard. When I look at kind of the color the call, just trying to get some granularity on, if your price was up 60 basis points, are you now caught up to price cost or are you still a little behind?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Hey, Scott this is Chuck. So I think that we are ahead of price cost because the great work that our procurement team does and the pricing, but I think inherent in your question here is what we see is that we should accelerate from here.

Scott Davis -- Melius Research -- Analyst

(Multiple Speaker) accelerate the -- be at least neutral to the rising prices that are coming -- or costs that are coming in?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

I think rather than 60 basis points is what I'm saying is I'd expect it to be greater than that going forward. As tariffs happen to us, not all -- some of our countermeasures are supply chain in nature, but some of them are more price. But they don't haven't even hit yet really. So that's going to be a tailwind and we think we're in inflation -- we know we're in an inflationary environment and we think that we will -- we expect to get more price than normal, more than historical.

Jim Lico -- President and Chief Executive Officer

Scott, maybe just one thought. We'll see it accelerate in the fourth quarter as Chuck said. So, a lot of our countermeasures early in the third quarter were an attempt to kind of what I'll call short term in nature and as Chuck mentioned, the supply chain and pricing things are really going to carry the water in the fourth quarter and into 2019. And we've been pretty deep into this trying to make sure that we're appropriately covered and we feel pretty good about that. The fact that we expanded gross margins in part because of the business model change in the quarter, I think also reflects that we started to get some traction in some of those efforts relative to how we go into the fourth quarter.

Scott Davis -- Melius Research -- Analyst

Okay, that's fair enough. And then just to back up a little bit and Gordian and Accruent, how long do you think it takes to get there -- get the margin structure of businesses like that up to your segment average?

Jim Lico -- President and Chief Executive Officer

Well, Gordian is pretty close already. So we -- I think by probably relatively quickly in both businesses, really I think we're probably in the range of that by 2019 and into 2020. So maybe second half for 2019 and into 2020, we will be in the zone. And they're great businesses, we -- one of the caveats to that though is as we get into it and we do the 100-day strategic plans, I think the question we're going to ask ourselves is can we accelerate the growth rate. So some of that might require additional investment and we've seen that benefited (inaudible) to take it back to the question we had before, we're starting to see some of that accelerated growth that (inaudible) because we didn't necessarily put all the money to the bottom line early at (inaudible) we decided to invest in sales and marketing. So we haven't necessarily done that yet, we'll wait to sort of go through the 100-day strategic plan, but we certainly are going to look for opportunities to accelerate the growth rate with the kind of gross margins that are in those businesses and the recurring revenue, we think that would be a prudent thing to do.

Scott Davis -- Melius Research -- Analyst

Okay. And just real quick, I never ask three questions, but I'm going to this time, because I'm just trying to figure out when you have a hurricane impact like you had in say, (inaudible) point of the top line or something on Industrial Technologies, can you measure with any precision, what kind of margin impact that has?

Jim Lico -- President and Chief Executive Officer

Yes, I think the margin impact on volume, we calculate the fall through at greater than 50%. So yes, we've got a pretty good idea, but the margin in terms of -- operating margin that we're talking about NPI, is also the fact that with the increasing volume at Gilbarco, we're also ramping up and we were sufficient and we would normally be if due to really just the increasing volume we're seeing. But we expect IT to deliver 50 basis points of OMX in the whole business in for the whole year or so, we're going to be OK.

Scott Davis -- Melius Research -- Analyst

Okay. That's what I thought. Okay, thank you guys. Appreciate it.

Jim Lico -- President and Chief Executive Officer

Thanks, Scott.

Operator

And your next question comes from Steve Tusa from JPMorgan.

Steve Tusa -- JPMorgan -- Analyst

Hey guys, good afternoon. Can talked about, you said you're watching China, what exactly specifically are you watching in China for 2019? What kind of make you most cautious, I guess -- not that you're cautious, but what worries you the most out of China? Specifically for your business?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Yes, I mean what we saw, we said in the prepared remarks that there were some challenging parts and what we meant by that is really the utilities. We saw where we have utilities sales principally at Qualitrol and a small part of Fluke, we clearly saw some investment going down in those parts of the business now, they don't have the -- we still grew high single digits, so it didn't have a huge impact. But we are watching for the particular verticals to see if there's trends we look at our point of sale at Fluke which just remained strong. But we want to continue to watch that, that's sort of a good deal it was just a sort of day-to-day economy. And of course, we're going to continue to watch semiconductor and electronics in markets in China because of the impact that that has on Tektronix. So those are probably some places where that sort of move the needle if you will relative to our business. And obviously the gas station business, the GVR Veeder-Root business has been secularly growing because of the investment in double wall tank and that's a trend right now, that's going very well for us. And so there are certain secular trends within the GVR business that we'll watch as well.

Steve Tusa -- JPMorgan -- Analyst

Great. And just on the tariff stuff. Can you give us some color as to how you went about coming to that number, almost all of our companies are kind of coming up with some reasonably sizable numbers and just their simple way to look at it, which is (inaudible) sourced from China and that applying like anywhere from 10% to 25%, (inaudible) maybe if you give us some color on how you came to the math? Are you getting to or you think you can offset it entirely with price on the tariffs? And what are you including in that which tariffs are you including?

Jim Lico -- President and Chief Executive Officer

So, Steve, a couple of things, first of all prices one lever we're using but it's not the entire lever. We're also using, going after supply chain where we're sourcing and in some cases, moving where we're going to be producing our products. But all those things come together to offset the tariffs that we see from all, the 232 and the 301s, it was 123, all three of those lists. We actually have our -- we've got our teams work on it and the duty team is, sizes that very specifically and there's -- it's really pretty prescriptive and we feel like we have, I think, rather exact amount, I mean, you -- we ship more and there will be more duties. But we have a good handle on exactly what it is, and therefore, we've been matched up counter measures. There is generally a lag, we're seeing a lag of when a new tariff, not saying that we more new tariffs, but new tariff goes in where it takes us, probably better part of the quarter at least couple of months to get them in and takes this quarter to fully offset that in a run rate and so, since we last talked, there's been new list to put out. And so that's why it's given us a little bit of -- a little more hit in the back end, but as I say, we feel we've got it handled and offset in 2019.

Steve Tusa -- JPMorgan -- Analyst

So what's the total number, year-over-year cost that you have to overcome?

Lisa Curran -- Vice President of Investor Relations

The dollar number?

Steve Tusa -- JPMorgan -- Analyst

Yes.

Jim Lico -- President and Chief Executive Officer

Yeah. We have it in the range of $50 to $70 million.

Steve Tusa -- JPMorgan -- Analyst

Okay, great. That's what we're looking for. Thanks.

Jim Lico -- President and Chief Executive Officer

Thanks, Steve.

Operator

And your next question is from Deane Dray from RBC Capital Markets.

Deane Dray -- RBC Capital Markets -- Analyst

Good afternoon, everyone.

Jim Lico -- President and Chief Executive Officer

Hi, Dean.

Deane Dray -- RBC Capital Markets -- Analyst

Hey, wanted to go back --yes, wanted to go back to the price question again, and f I heard it correctly, you said you had forwarded on a 6 businesses at positive price. So who didn't get price and any kind of calibration in terms of the ranges of price you're getting any push back from customers and what more you can do there?

Jim Lico -- President and Chief Executive Officer

Yes, I think part of -- first and foremost, I think as we look at the price metric, as we said 60 bps. In every quarter, we'll have a few businesses that maybe don't hit that number, I think product realization, we didn't hit it, in part because we've got some contracts in the third quarter with some U.S. military folks that carry price reductions is an example. But on balance, we're really looking at the full year, and as we look in this, I suspect we'll be in a good position as we get to the sort of second half price, we'll find the most of the platforms we've gotten price at that point. So, that's really how we think about it. And as Chuck mentioned on the previous question, we're going to see an acceleration of price. Most of the price increases are in, so the gross price is in, so from that perspective, I think we're going to be in good shape to continue to offset any price inflation, any cost inflation that we have whether it be tariffs or anything else plus gain some of that prices as a margin expansion opportunity as well in 2019.

Deane Dray -- RBC Capital Markets -- Analyst

Got it. And then just a separate topic with the welcoming Gordian and Accruent, it's just becomes increasingly obvious that your current segmentation doesn't quite fit the new look for Fortive. So what kind of thought have you given to resegmenting and what might that look like?

Jim Lico -- President and Chief Executive Officer

Well, I think that -- we've noticed this similar things as we're really excited with Gordian and Accruent and our acquisitions to come on board. But our current thinking is that we'll wait till we get to the other side of the ASP business. And then that's the timing that will makes sense. Probably looking at a platform level, first that what's going to make the most sense and it will be after that. So that's what I'd expect.

Deane Dray -- RBC Capital Markets -- Analyst

Got it. Thank you.

Operator

And your next question comes from Nigel Coe from Wolfe.

Nigel Coe -- Wolfe Research -- Analyst

Yes, So this is Nigel Coe for Michael Coe here. Hey guys.

Jim Lico -- President and Chief Executive Officer

Hey Nigel.

Nigel Coe -- Wolfe Research -- Analyst

Nigel. So you are making this work pretty hard late at night here. So maybe a little bit help on the 5% to 6% for 4Q. I guess, would you expect both segments to be in that range or are we seeing IT above that range with the GVR ramp-up and maybe PI is still seeing some of these headwinds, any color there in particular on some of three or four major businesses will be helpful.

Jim Lico -- President and Chief Executive Officer

I think, we'll, we should see pretty evenly distributed. So, I suspect around those numbers, so probably in the range -- they will be in the range of each other probably, I don't think we'll see an enormous delta between the two, to be honest with you, Nigel. And I think you'll see the continuation of businesses like Fluke, you see the continuations -- you see some acceleration at Gilbarco, you'll see some good acceleration at Tektronix as examples. It's kind of hard for us to not move the needle up in the whole business without the big businesses going up. So I think you'll start to see that, some of that will be backlog related and some of that will be just demand that we see. So that's sort of our assumptions, regionally we sort of think the U.S. will continue to be pretty good. As we mentioned, Western Europe, Europe broadly defined what we think of it maybe a little weakening. So, parts of Western Europe, but also Russia and the Middle East, Russia and the Middle East have been weaker and we would see that continuing and continue to see China and Asia be pretty good. So, I think that's kind of how we think about it regionally and maybe give you -- but we think the big businesses, for the most part Fluke hanging in there, Matco hanging in there, Gilbarco and (inaudible) probably being a little bit better.

Nigel Coe -- Wolfe Research -- Analyst

Great, that's helpful. And then you're looking at the IT segment ex automation, I think the numbers we are working with since it's about trendsetting margin for the new segments? You mentioned (inaudible) trying to cost -- are all of these going to cost from the automation divestments in that segment and how does that look, and then structure way those stranded costs? Any qualification of the cost would be helpful.

Jim Lico -- President and Chief Executive Officer

They're not really that bigger costs, but there, you right there in the IT segment and will get after them in the fourth quarter. Some, we've got some opportunity here with some acquisitions to redeploy these people. So, it's not necessarily needing risks that much restructuring dollars to get him out, though there could be some, but we'll get after that and it is in the IT section.

Nigel Coe -- Wolfe Research -- Analyst

And then just quickly on ASP, I standard that China Finance not required for that deal, is that because the --it doesn't meet the threshold for China sales?

Jim Lico -- President and Chief Executive Officer

Yes, that's the easiest way to think about it, I mean, I think as we think about all the regulatory hurdles we mentioned the prepared remarks that we got through the European Works Council consultations which was a good step. And we don't really see any issues with China principally because it's not -- there's really no antitrust work at all. So, it's really focused on setting up subsidiaries and things like that, which are much simpler parts of that -- much hard to do but much simpler than things like antitrust -- waiting for antitrust approval.

Nigel Coe -- Wolfe Research -- Analyst

Okay, thanks.

Jim Lico -- President and Chief Executive Officer

Thanks, Nigel.

Operator

And your next question comes from John Inch from Gordon Heskett.

John Inch -- Gordon Heskett -- Analyst

Hi, everybody.

Jim Lico -- President and Chief Executive Officer

Hi, John.

John Inch -- Gordon Heskett -- Analyst

Hi, guys. So the core margin declined in the quarter of 25 basis points. Jim, you had thought -- you and Chuck had thought the margins will be up 30% to 50%. Is the delta the lost reduction days? The lower volume, is there some way to just sort of you can parse that out in terms of what accounted for that difference?

Jim Lico -- President and Chief Executive Officer

Yeah, John. There's two things, one is evenly split between the last production and the volume we would have got flowing through it, greater than 50% margin. And the other, as we mentioned, we are accelerating into our Gilbarco business and we saw some maybe growing paints and an increase in the volume there and spent and -- we expect to do better and coming into Q4, but those are the two things that really drag us down from where we thought we would be on our core OMX in Q3.

John Inch -- Gordon Heskett -- Analyst

(inaudible) kind of play out Jim toward the end of the quarter in terms of say September, the weaker volumes and stuff or was this kind of a trend that you noticed that it's relatively consistent?

Jim Lico -- President and Chief Executive Officer

Well, I think there were two things, where -- there's the EMV wave that came in that was maybe toward the end. But there was other things that happened during the quarter that got pushed out that really unrelated to that. In some -- one-time customer push outs that just move things into October.

John Inch -- Gordon Heskett -- Analyst

That's fine. Field Solutions, I think was up low-single versus mid-single last quarter and that compares look about the same. You guys sounded pretty upbeat on Fluke, based on the commentary. Was it all Qualitrol that drove that lower realized growth rate or was Fluke also a little bit softer?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

I think Fluke was a little softer maybe 100 bps or something like that, but it's not -- the big delta there is Qualitrol, we really saw -- we have been working with the business to try to work in a tough market and they just had a tougher quarter then really around the world as we mentioned in the prepared remarks. So, ISC did great Fluke did great, so it's really -- and we think that'll continue and we're continuing to work on countermeasures at Qualitrol. But as I mentioned in the prepared remarks, we think that's going to -- luckily, that's one of our smaller businesses, but it is going to probably continue into 2019 year as we can tell at this point.

John Inch -- Gordon Heskett -- Analyst

Jim, how confident are you in, I mean the big businesses like Fluke, Tektronix, given what's going on in the global economy, you've outperformed in China, but -- and Europe, it looks like a little bit but not every company is. I'm just -- you've lived through these sort of periods before. I mean how do you respond, like are you guys doubling down various efforts are you thinking about the other kind of measures for possible global softening? I mean what's sort of the playbook?

Jim Lico -- President and Chief Executive Officer

Yes. Well, unfortunately, I have been through this kind of thing too many times. But I think at the end of the day, what Chuck I really have done is we will go through the budget cycle with the businesses here in the coming weeks here and we'll really sit down on an individual-by-individual basis to understand where they think their revenues is going to be and it is really going to be -- certain businesses are going to probably have opportunities. I think right now it's still a little early. We're trying to manage -- trying to understand the headlines versus the reality as I mentioned in China. I think there's -- we have seen, as I mentioned, some places where demand has moved. But in other places, we haven't really seen any change and so we're going to maintain a realistic view while we continue to see how things go and I think this idea that globally -- I mean I think we're already -- having listened to a lot of peers talked about this already and certainly others and having talked with several CEOs as well, I think we definitely know that this globally tuned growth is probably not happening now and so it's going to be more important to make our bets correctly and we know how to do that. And while at the same time making sure we take advantage of opportunities like we mentioned North America, EMV. We think it's going to be a tailwind for us next year and so we want to make sure we take advantage of those opportunities.

John Inch -- Gordon Heskett -- Analyst

Yes. Perfect. Thank you very much. I appreciate it.

Jim Lico -- President and Chief Executive Officer

All right. Thank you.

Operator

And your next question comes from Andrew Kaplowitz from Citi.

Andrew Kaplowitz -- Citi -- Analyst

Hey, good afternoon guys.

Jim Lico -- President and Chief Executive Officer

Hey, Andy.

Andrew Kaplowitz -- Citi -- Analyst

Jim, (inaudible) in this quarter I think it's been a fair amount of the multi-industry coverage that talked about transactional cost headwind. How should we think about currency going forward for you guys, it was just in a few emerging markets that you saw it, where currency really moved and would the impact really continue into Q3, could you see any more in Q4 and beyond?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Andy, this is Chuck. We saw little FX movements and it costs us about probably $0.01 in the quarter. But we don't -- if you're asking about hedging, we don't hedge for that. We just think that currencies move and we need to deal with those things and in general, they move enough then we have to adjust our cost structure but we are not seeing huge dollars for us in our businesses right at -- in the third quarter at all.

Jim Lico -- President and Chief Executive Officer

Andy, we do spend a lot of time with our teams on street price within each country. So where we've seen currency movement, we want to make sure that we're -- street prices are impacted where we're taking prices up or dealing with that. So that's a pretty common piece of work that our operating company leaders do on a regular basis.

Andrew Kaplowitz -- Citi -- Analyst

And Jim, you mentioned the strong order book given EMV in North America and obviously there was a hurricane impact in the quarter. I think you said GVR grew low single-digits in North America. What would it have grown at? And then as you look into next year, have you got now good visibility toward that acceleration that you've been talking about?

Jim Lico -- President and Chief Executive Officer

Yes, a few months ago we said we thought the GVR would probably be mid-single digit in the second half and we still view that it's just going to be probably a little -- slightly higher mid single-digits and in the fourth quarter and obviously low single-digits in the third. So, the cadence of it changes a little bit because of the movement of shipments. But I think our view of the world in the business is pretty close to the same. We would like to see the -- I think we'll start to see some of the larger customers come into the order book here in the fourth quarter. And we're obviously looking for that. But, we feel good about what they've got for a forecast at this point given the order book.

Andrew Kaplowitz -- Citi -- Analyst

Thanks guys.

Jim Lico -- President and Chief Executive Officer

Thanks, Andy.

Operator

And your next question is from Richard Eastman from Baird.

Richard Eastman -- Baird -- Analyst

Just -- hey, Jim, just -- I want to just return to EMEA for a minute. Again, kind of this low single-digit growth rate, you talked a little bit about Qualitrol, I think you said JVS was weak. But that -- is the trend at all kind of disturbing here as we kind of head into -- again head into '19? Do you see some of these businesses and maybe you could give a little bit more color on Western Europe versus Middle East in that low single digit growth rate, but just kind of talk about maybe an inflection point here in that region.

Jim Lico -- President and Chief Executive Officer

Yes, I think -- well, I think for sure is that, we don't have a huge business in Russia. So, it doesn't necessarily move the needle for us, but a lot of folks talk about EMEA and they're talking about this kind of the way they run the business, right, which is a leader usually runs all those places. And really, we think about Western Europe, Fluke point of sale as an example, in Western Europe was actually pretty good. So that gives us some sense of optimism that some things are there, but then we've got a pretty decent size business in Italy as an example of GVR. That was obviously hint -- that was hindered, we mentioned the Qualitrol situation as well. I think at this point, it's hard -- it's too early to tell what Europe might look like for '19. But I think as we think about Western Europe, we've had really three really strong years in Western Europe. And I think that the mid-single digit growth that we saw in the last several years is definitely moving to low single-digit, and we certainly heard the decline in this quarter. So, I'm not sure I would call it a decline next year. But we're certainly seeing a slowing broadly defined.

Richard Eastman -- Baird -- Analyst

Okay. And then just a very quick question on -- you just mentioned Fluke held solutions in kind of in passing. So, this is -- this basically you said it was a plus double-digits. that is still primarily Fluke Biomedical, how did Landauer perform in the quarter and what are the prospects there?

Jim Lico -- President and Chief Executive Officer

Yes. They were in the mid-single digit in the quarter, Fluke has had a very good quarter. In fact, we were with the team yesterday for their strategic plan, really excited about how they're bringing the integration together, how they're really thinking more broadly about a broader set of solutions now that they've got all these different customer sets. So, they certainly outperformed in the quarter for sure, but we're ahead of where ahead of the head of where we wanted to be with Landauer at this point. And now the team is really working on some strategies to stay ahead and I think we're very excited about what that team is doing.

Richard Eastman -- Baird -- Analyst

Okay. Very good. Thank you.

Jim Lico -- President and Chief Executive Officer

Thanks, Rick.

Operator

And your next question comes from Jeffrey Sprague from Vertical Research.

Jeffrey Sprague -- Vertical Research -- Analyst

Thank you. Have I got that one -- how is it going. Haven't gotten that one for a while. Hey, two things for me first just on EMV, can you give us a sense of now what you're actually expecting in 2019 as a growth rate off this modestly rebased 2018?

Jim Lico -- President and Chief Executive Officer

Yes, I think we think right now it's probably looking -- I mean it's -- crystal ball would say probably mid-single digit for next year.

Jeffrey Sprague -- Vertical Research -- Analyst

And then secondarily, just trying to sort through actually the margins and kind of the deal accounting noise, just a little confused on the transaction cost, kind of the 90 bps or so that's in PI. That's only roughly $8 million bucks, so Chuck is rest of that $56 million that we see in the bridges is that -- so just another --?

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Yes, that another because you've got -- you don't really have ASP in one of the segments appropriately and ANS is not going to be there going forward.

Jeffrey Sprague -- Vertical Research -- Analyst

I see. And then other looks like it's been kind of inherently low if we pull that out. Is there something else going on there, too?

Jim Lico -- President and Chief Executive Officer

No, I don't think so. I didn't think you picked out that was slow, we've got normal corporate cost in that as well.

Jeffrey Sprague -- Vertical Research -- Analyst

Okay. All right, and just $58 million, if I take out close to $50 million, it seems like a low number, but I'll follow up.

Jim Lico -- President and Chief Executive Officer

Well, no -- yes, we can follow that. But I think of the total amount, there's some of it's in -- into the businesses. The Gordian and Accruent did get in there. So you're missing about $18 million, I think, relative to the deal cost associated with Gordian and Accruent. But we can follow up on that.

Jeffrey Sprague -- Vertical Research -- Analyst

All right. Thank you.

Thanks, Jeff.

Operator

And your next question comes from Scott Graham from BMO Capital.

Scott Graham -- BMO Capital Markets -- Analyst

Hey, guys. Good evening. Hey, just, I'm looking at the slide 9, the bridge, the initial thinking on 2019 and the closed acquisitions, when we throw ASP in there, we consider ANS, it looks kind of like largely a push, correct me if I'm wrong. And I am sure when you transact in the amount that you have still will with ASP that, I guess that's kind of not what you're thinking that you would want sort of net accretion there. So how does the pipeline look right now? And could you give us an idea of what you our capacity is at this moment and do the acquisitions that have closed and with ASP coming, is that going to slow you down a bit?

Jim Lico -- President and Chief Executive Officer

So, we'll (inaudible) this one. I think the funnel looks good right now. I think we, as we've talked, since we, over the last couple of years, we continue to see opportunities available to us. The Gordian and Accurent deals bring new parts of the funnel. That's the nice thing about those acquisitions. They come with new market opportunities, new served market opportunities in which we can look at and, because they were PE owned, they were pretty active on the M&A front. So they come really with funnels already in hand, and so we've got some opportunities there. ASP does as well, but obviously we'll wait to close that deal. So, I think first and foremost, we like the funnel, we like the situation we're in. We've been pretty busy over the last 90 days, that's for sure. But we don't necessarily slow the market work down and the cultivation work down and so the opportunities are still there. So, the current market situation is going on it's over the last couple of weeks. Obviously the consternation in that kind of thing, probably shakes the trees and some other things, but we haven't seen those yet.

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

And then Scott, to your other questions, I'd would simply say we have 2 billion, 2.5 billion of room that maintains investment grade in 2019. And then with our strong cash flow that will, as we said, we keep to delever work to delever going forward. In terms of slide 9, I think if you're seeing a push if you mean a push from this year, I think you need to add in what's not in there is either and we can work with you offline on this is there organic margin expansion or the ASP, you might, you're probably missing that.

Scott Graham -- BMO Capital Markets -- Analyst

Actually, what I meant was the, on the acquisitions, it looks like the closed acquisitions plus ASP minus ANS is roughly a push. Is that a fair estimate?

Jim Lico -- President and Chief Executive Officer

No, because -- there is some of other, it's complicated and it's easier to come off line. But you're missing the retired shares that comes with the ultra deal which is understandable and how the mentor convert plays into that. So let us walk you through that, but I think that there -- it's not an exact push.

Scott Graham -- BMO Capital Markets -- Analyst

Great. That'd be helpful. The other question is on the same pages. I didn't hear you talk about organic at all, but, and I know that at the Investor Meeting, I think you're kind of being pushed to move up your long-term target of GDP, GDP plus, but with things now little bit weaker in Europe and some concerns in China, but then you add in a little faster growth acquisitions, can we still stay at that GDP, GDP plus level for organic for next year?

Jim Lico -- President and Chief Executive Officer

I think, we tried to give you early color even before our budget. So, I 'dthink I'd stay away from any specific numbers at this point, so we see how the quarter plays out, see how we end, that has some influence on it as well. But we certainly think that that's in the range of options for sure. S,o I think we'll certainly as we get closer to it provide some deeper level of insight as to that goes. What we tried to do with the 2019 early view is, really just to try to give you a little sense of how we're thinking about this given all of the puts and takes that have occurred as you and Chuck were just talking about. We want to make sure you at least had some view of how we're thinking about it and as we get more details will obviously share them with you.

Scott Graham -- BMO Capital Markets -- Analyst

Very good. Thank you.

Thanks, Joe.

Operator

And your next question comes from Joe Giordano from Cowen.

Analyst -- -- Analyst

Yes. This is (inaudible) in for Joe, thanks for taking the question. Just a quick one here. What's the share count that you're using for your 4Q guide?

Jim Lico -- President and Chief Executive Officer

I guess $356 million.

Analyst -- -- Analyst

Perfect. Thank you so much.

Lisa Curran -- Vice President of Investor Relations

That was quick.

Jim Lico -- President and Chief Executive Officer

He said it was quick?

Operator

And there are no more questions in queue.

Jim Lico -- President and Chief Executive Officer

Okay. Well, thanks everybody for the time this evening on the East Coast. We really appreciate all the time and energy you put into really help and really listen into our discussion, we're exceptionally excited. I think the third quarter to use the word transformational would be an understatement with everything, we were able to accomplish in the quarter. We're incredibly pleased at where we sit today and we're even more excited about what we can do with these businesses here in the coming months and years. So thanks for your time. We'll look forward to seeing many of you in various places here throughout the fall, but thanks for your time and and certainly Lisa and the IR team are available for questions and follow-up. Thanks everybody have a great night.

Operator

And this does conclude today's conference call. You may now disconnect.

Duration: ?? minutes

Call participants:

Lisa Curran -- Vice President of Investor Relations

Jim Lico -- President and Chief Executive Officer

Julian Mitchell -- Barclays -- Analyst

Chuck McLaughlin -- Senior Vice President and Chief Financial Officer

Andrew Obin -- Bank of America -- Analyst

Andrew Kaplowitz -- Citi -- Analyst

Steven Winoker -- UBS -- Analyst

Scott Davis -- Melius Research -- Analyst

Steve Tusa -- JPMorgan -- Analyst

Deane Dray -- RBC Capital Markets -- Analyst

Nigel Coe -- Wolfe Research -- Analyst

John Inch -- Gordon Heskett -- Analyst

Richard Eastman -- Baird -- Analyst

Jeffrey Sprague -- Vertical Research -- Analyst

Scott Graham -- BMO Capital Markets -- Analyst

Analyst -- -- Analyst

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