Schneider beats profit expectations as data center demand offsets weak dollar

Feb 26 (Reuters) - French industrial group Schneider Electric SCHN.PA on Thursday reported stronger-than-expected core earnings, driven by robust data centre demand, supporting its 2026 outlook despite pressure from a weakening dollar.

The group saw triple-digit year-on-year growth in demand in the pure data centre segment leading to 10.7% organic growth in overall quarterly revenues to 11.10 billion euros ($13.12 billion) and full-year adjusted earnings before interest, taxes and amortisation (EBITA) of 7.52 billion.

Analysts polled by the company expected on average fourth-quarter revenue of 10.90 billions and full-year adjusted EBITA of 7.48 billions.

Schneider, once known primarily for industrial components like fuses and circuit breakers, now builds the backbone of data centers, supplying everything from cooling units and server racks to critical power distribution equipment.

It is the latest company to provide bullish expectations for AI demand this year, after upbeat comments by chipmaker Nvidia NVDA.O and French electrical and digital building infrastructure group Legrand LEGD.PA.

DATA CENTERS SUPPORT GROWTH

Schneider said it expects organic revenue growth between 7% and 10% and its adjusted EBITA margin growing between 50bps and 80 bps this year.

That is in line with long-term targets it laid out in December, which guided for average annual organic revenue growth of 7% to 10% and organic adjusted EBITA margin growth of around 250 basis points cumulatively between 2026 and 2030.

The group, which makes over a third of its revenues in North America, said it expected a foreign exchange impact of between 850 and 950 million euros on its 2026 revenues, after currency fluctuations reduced its fourth-quarter revenues by 701 million euros due to a weakening dollar, Indian Rupee and Chinese Yuan.

Schneider also said its CFO Hilary Maxson will leave the company on April 5 and will be replaced by investor relations head Nathan Fast.

($1 = 0.8462 euros)