Alstom Stock Tumbles in Q1 2025: A Closer Look at the Rail Giant's Performance
Stockholders momentarily halt Alstom's progression
In the first quarter of 2025, Alstom, the French rail engineering giant, hit a stumbling block, sending its stock into a tailspin. Despite reporting a return to profit and increased orders, the company's disappointing cash flow forecast has left investors disheartened.
The stock market hasn't shown Alstom much mercy, with shares plummeting by up to 17% and hitting a five-week low. It all comes down to the expected free cash flow for the current fiscal year, which is projected to be between €200 million and €400 million, a far cry from the market expectation of €551 million.
But the story doesn't end there. In the previous fiscal year, which concluded in March 2025, Alstom posted a net profit of €149 million - a significant improvement from the net loss of €309 million in the prior year. Additionally, revenue clocked in at €18.5 billion, marking an increase of 4.9%, and orders reached nearly €19.9 billion, up 4.7% from the previous year [1].
The adjusted operating result, or EBIT, also saw a substantial rise of 18%, reaching nearly €1.2 billion, resulting in a margin of 6.4%. Although analysts had slightly lower expectations, this progress is hard to overlook [1].
Alstom attributes its improved results to increased sales of rolling stock. The company's performance in France, Italy, South Africa, Belgium, and the US has been particularly strong. Back in April, Alstom announced plans to invest in France and hire at least 1,000 new employees [1].
Looking ahead, Alstom anticipates organic sales growth of 3% to 5% and an adjusted EBIT margin of around 7%. The company also hopes to achieve free cash flow within the range of €200 to €400 million, acknowledging that seasonal fluctuations could impact the first half of the fiscal year [1].
Heads Up: For a more comprehensive analysis, keep an eye out for Alstom's Q1 2025 financial results when they're released. Until then, investors might want to consider the company's solid annual results and medium-term ambitions [2][3].
[1] ntv.de, jwu/rts/DJ[2] Overall: Alstom Q1 2025 Stock Prices and Performance Analysis[3] Economy: "Very Good News" Train Factory in Görlitz to be Converted into an Armoury (enrichment data)
In light of Alstom's Q1 2025 financial results, the company's community policy, as demonstrated by plans to hire at least 1,000 new employees, could potentially attract investors seeking employment opportunities. However, the stock market's unfavorable reaction to the company's disappointing cash flow forecast may impact its short-term fiscal planning, such as investing strategies or future growth initiatives like acquiring more stock-market listed companies.
