- Company says sales affected by greater project selectivity
- China declined at slower pace, other Asian economies stable
Schneider Electric SE reported first-quarter sales that beat analysts’ estimates, bolstered by construction growth in the U.S. and cherry picking more profitable projects in a slumping oil-and-gas industry.
Sales at the the world’s biggest maker of low- and medium-voltage equipment declined 3.7 percent to 5.77 billion euros ($6.5 billion), Rueil-Malmaison, France-based Schneider said in a statement Thursday. Analysts had forecast 5.65 billion euros, according to the average of four estimates compiled by Bloomberg. Sales rose 0.1 percent on a comparable basis and the company confirmed 2016 financial targets.
“We see growth in Western Europe and in the construction market in the U.S., continued weakness in oil and gas and its related segments, and a mixed picture in new economies outside China,” Chief Executive Officer Jean-Pascal Tricoire said in the statement.
Schneider is focusing on cutting costs and boosting profitability to counter a sluggish construction market in France, a slowdown in growth of the Chinese economy and low crude prices that have led to fewer projects in the oil and gas industry. The company last year dropped a plan to acquire a controlling stake in British industrial software maker Aveva Group Plc.
Shares of the French company gained 4.2 percent to 58.82 euros as of 9:21 a.m. in Paris.
Schneider confirmed its full-year forecast for organic revenue to be unchanged or down by a low, single-digit due to a “higher selectivity” of project activities.
"The company is focusing on margins and profitable projects," Jawahar Hingorani, a Bloomberg Intelligence analyst, said on the phone before Schneider published its first-quarter revenue. Last year, Schneider sold its lighting activity Juno to Acuity Brands as part of its strategy to focus on energy management and automation. The impact of net acquisitions in the first quarter amounted to 85 million euros or a decline of 1.4 percent of revenue.