Schneider First-Quarter Sales Beat Estimates on Asian Demand
Schneider Electric SA (ALO), the world’s biggest maker of low- and medium-voltage equipment, reported first-quarter sales that beat analyst estimates, helped by acquisitions and demand in China and emerging markets.
Revenue climbed 7.7 percent to 5.67 billion euros ($7.84 billion), the company, based in Rueil-Malmaison near Paris, said in a statement today. Analysts had forecast sales of 5.4 billion euros, according to the average of six estimates compiled by Bloomberg. Excluding exchange rates and acquisitions such as Britain’s Invensys Plc, revenue climbed 2.5 percent.
“We start the year with solid growth,” Chief Executive Officer Jean-Pascal Tricoire said in the statement. He reiterated his targets for 2014 revenue and profitability.
The French company, which is cutting costs to adapt to a construction slump and government austerity measures in Europe, plans to add more manufacturing and support functions in faster-growing markets such as India to be less exposed to the euro’s appreciation that dented sales and profitability in 2013.
Schneider (SU) still predicts low single-digit organic sales growth this year and a 0.4 percentage point to 0.8 percentage point advance in its adjusted margin for earnings before interest, taxes, and amortization, excluding currency effects, from the 2013 pro forma level which includes Invensys.
Currency fluctuations shaved 268 million euros off revenue in the first quarter as the euro rose against the U.S., Australian, Indian, Brazilian and Russian currencies, Schneider said. Based on current exchange rates, currencies swings would have a negative impact on full-year revenue of 900 million euros to 1 billion euros, it said.
Acquisitions added 546 million euros to first-quarter sales, Schneider said.
The French company last year bought a 50 percent stake in Russia’s Electroshield-Samara it didn’t already own, and in January completed the acquisition of Invensys, a U.K. maker of software and control systems used in the chemical, oil and gas, and mining industries. On April 3, it said it entered in talks to sell its sensors unit to Carlyle Group LP and PAI Partners.
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