French electrical and digital infrastructure firm, Legrand, has adjusted its sales growth forecast downward, despite reporting a net profit increase to $1 billion for the first nine months of 2023. This comes in the wake of a shrinking building market. The company's sales rose by 2.5% to €6.31 billion, while its operating margin guidance was revised to between 20.5% and 21%.
Europe, accounting for 42% of total revenue, spearheaded this growth. Energy-efficient solutions, data centers, and connected products were pivotal to this surge in revenue. However, the company's recent withdrawal from Russia is expected to negatively impact Q4 results.
In addition to its financial results, Legrand announced the acquisition of California-based ZPE Systems. The firm specializes in secure console servers and services routers and boasts a workforce of over 140 employees. This acquisition is set to add over $80 million to Legrand's annual sales.
Looking ahead to the end of 2023, Legrand projects a net income loss of €45 million but anticipates a positive cash impact of €15 million.
InvestingPro Insights
According to InvestingPro data, Legrand has a market cap of $5264.29M and a P/E ratio (Adjusted) of 17.96 as of Q2 2023. The company's revenue for the same period is $1431.58M, marking a growth of 16.68%. Its gross profit stands at $736.91M, indicating an impressive gross profit margin of 51.47%.
InvestingPro Tips reveal that Legrand has a perfect Piotroski Score of 9 and has been consistently increasing its earnings per share. The company has also commendably raised its dividend for 3 consecutive years and maintained dividend payments for 18 consecutive years. Furthermore, Legrand's liquid assets exceed short term obligations, and it operates with a moderate level of debt. Despite some analysts revising their earnings downwards for the upcoming period, the general consensus predicts that the company will be profitable this year.
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