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Investing.com -- Schneider Electric (EPA:SCHN) shares rose more than 5% after the company posted strong fourth-quarter results, outperforming market expectations and issuing an optimistic outlook for 2025.
The company posted a 12.5% organic revenue growth in the fourth quarter, far exceeding consensus estimates of 7.9%.
Total (EPA:TTEF) revenue came in 5% ahead of expectations, bolstered by significant strength in its Energy Management division.
The strong quarter was driven by a 15% organic revenue surge in Energy Management, with North America leading the way at 25% growth.
The Data Centers segment stood out as the fastest-growing unit, reflecting continued demand for infrastructure supporting cloud computing and artificial intelligence.
Schneider’s adjusted EBITA margin for the second half of the year reached 18.5%, surpassing consensus of 18.1% and reflecting a 90-basis-point organic expansion.
Adjusted earnings per share beat expectations by 6%, and free cash flow also came in 5% higher than anticipated.
For 2025, the company projects 7-10% organic revenue growth, surpassing the 8% market consensus. Adjusted EBITA margin is forecast at 19.2-19.5%, also exceeding the 18.8% consensus.
By segment, non-residential and technical buildings within the Buildings division showed strong demand, particularly in hotels and healthcare.
Data Center & Networks continued its double-digit growth trajectory, while the Infrastructure segment benefited from grid expansion efforts.
Industrial Automation remained mixed, with Process & Hybrid automation showing growth while Discrete automation struggled, especially in China.
Regionally, North America was the standout performer with a 21.9% organic revenue increase. Western Europe saw 5.8% organic growth, while Asia-Pacific recorded 4.6% growth, with China remaining weak due to construction-related headwinds. The Rest of the World segment performed strongly with an 18.5% organic revenue increase.
Schneider’s board has also proposed a dividend of €3.90 per share, ahead of consensus expectations of €3.75.
“We see Schneider as a high quality business, but maintain our Underperform rating reflecting sector relative valuation (~40% sector premium), the difficulty in surpassing already high expectations, and EPS momentum lagging top-line,” said analysts at RBC Capital Markets in a note.