(Reuters) - France's Bouygues (EPA:BOUY) reported first-quarter core earnings below expectations on Tuesday, citing a sharp decline in its Immobilier real estate unit that overshadowed a stronger performance in energy and construction.
The company's shares fell 4.5% in early trade.
"Bouygues Immobilier will continue to face a challenging market environment, with low visibility on the timetable for recovery," the company said in a statement.
Bouygues announced plans last month to lay off more than a fifth of its real estate staff in France as the construction market weakens.
The family-owned group posted first quarter current operating profit from activities (COPA) of 26 million euros ($28 million), missing a forecast of 34 million euros in a company compiled consensus where estimates ranged from a loss of 17 million euros to a profit of 59 million.
Group sales totalled 12.31 billion euros, broadly in line with the consensus of 12.18 billion, thanks to a 5% increase at energy arm Equans and a 6% jump at its construction unit.
Bouygues, which also operates in civil engineering and the media and telecoms sectors, acquired Equans from French power group Engie in October 2022 as it looked to grow through the energy transition and services.
Equans was combined with Bouygues' existing energy and services business to contribute more than 37% of the group's first quarter sales.
Bouygues said momentum for data centres, smart buildings, solar farms, gigafactories and biotechnology sites remained solid, mainly in Europe and the United States.
However, Equans’ backlog was down 2% year-on-year because of the gradual exit from the UK new-build business, notably social housing, due to unfavourable market conditions.
The order backlog at the construction unit, which accounted for almost 20% of the group's quarterly revenue, rose 4% year-on-year.
Bouygues confirmed its financial outlook announced in late February.
($1 = 0.9289 euros)