Schneider Electric raised its 2026 profit and revenue targets for the second time this year after AI data center demand drove record quarterly revenue of €11.46 billion ($12.9 billion).
Key Points:
- Third-quarter sales grew 16.9% organically, well ahead of analyst forecasts.
- Demand for data center equipment rose at a triple-digit rate in the quarter.
- Shares slipped as investors weighed a planned $22.6 billion takeover of software maker PTC.
Schneider Electric Q3 Revenue
The French electrical equipment maker reported a 16.9% organic rise in third-quarter sales on Friday, lifting revenue to its highest level for any quarter. Analysts had expected about 13.8%. Its energy management unit, which sells power and cooling gear to data centers, grew 18.8% organically to €9.62 billion.
Chief Executive Olivier Blum said data center demand rose at a triple-digit rate, giving the company "increasing visibility into 2027 and 2028." China and East Asia led with 26.1% growth, while North America, which brings in 40% of revenue, grew 19.9%.
The company now expects adjusted EBITA, a core profit measure, to grow 18% to 21% organically this year, up from 14% to 19%, with organic revenue growth of 12% to 14%, up from 10% to 13%.
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JPMorgan Questions PTC
The results show that AI spending is flowing well beyond chipmakers. Schneider, long known for circuit breakers, now builds much of the electrical backbone of AI data centers, from cooling units and server racks to power distribution gear. Investors were less impressed.
Shares slipped about 1.6% after early gains, with the planned takeover of software maker PTC seen as a possible drag on the stock. Schneider agreed on Oct. 5 to pay $205 a share in cash, valuing PTC's equity at about $22.6 billion, and its stock fell nearly 10% that day.
JPMorgan analyst Phil Buller downgraded the stock to neutral from overweight a day later. He also cut his price target to €310 from €345. He questioned steering about $27 billion in deals toward the less attractive industrial automation unit, though the bank called the selloff excessive.
Schneider's July Upgrade
Friday's move follows a first upgrade on Jul. 30, when record first-half revenue of €21.2 billion led Schneider to lift its organic revenue goal to 10% to 13% and its core profit growth target to 14% to 19%.
Buller, then positive on the stock, pointed to broad growth across all businesses and triple-digit momentum in data centers.
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