Schneider Electric SE first-quarter sales fell after the world’s biggest maker of low- and medium-voltage equipment was more selective on projects amid an oil and gas industry slump that continued to bite.
Sales declined 3.7% to 5.77 billion euros, 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% 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,” CEO 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 dropped a plan last year to acquire a controlling stake in British industrial software maker Aveva Group Plc.
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% of revenue.
By Ania Nussbaum