France's Schneider Electric first half results top estimates; raises outlook

France's Schneider Electric first half results top estimates; raises outlook
By Reuters

(Reuters) – Schneider Electric <SCHN.PA> reported on Thursday better-than-expected first-half results, helped by improved sales volumes and pricing at the French electrical equipment manufacturer’s energy management division.

The group, which markets products ranging from electrical car chargers and lighting control to transformers and production software, reported a 5.4% organic revenue growth for January-June, exceeding analysts’ estimates by 0.9 percentage point.

The first-half adjusted earnings before interest, tax and amortisation (EBITA) came in at 1.96 billion euros ( £1.75 billion ) with a revenue of 13.20 billion euros, beating analysts’ estimates of 1.92 billion euros and 13.12 billion euros, respectively.

The company’s energy management division reported solid growth, underpinned by high demand for products and services mainly in the United States and Canada.

The residential, commercial and industrial buildings end-market remained strong, while the energy management unit also benefited from higher investments in construction and infrastructure end-markets in China.

Demand in energy management offset weakness of industrial automation, which saw discrete and original equipment-manufacturing markets slow down during the second quarter, affected by the U.S.-China and U.S.-Mexico trade tensions. This softness is expected to continue into the second half of the year, the company said.

The company, which has a history of raising its forecasts several times a year, hiked its full-year outlook on adjusted EBITA organic growth to 6%-8%, and organic sales growth to 4%-5%.

These targets are roughly in line with what analysts polled by the company expect for the year.

Schneider has also been actively reviewing its operations portfolio to focus on its core businesses and speed up growth at its two divisions.

The French company is keen to review 1.5 billion euros-2 billion euros of revenue over 2019-2021, and said it has exited about 0.3 billion euros of the targeted range, having disposed of its video surveillance manufacturer Pelco and the U.S. HVAC control panel offer.

(Reporting by Piotr Lipinski in Gdynia, Editing by Sherry Jacob-Phillips)

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