Alstom Third-Quarter Sales Rise 11% on Trains, Power

By Ross Larsen

Jan. 20 (Bloomberg) -- Alstom SA, the world’s third-largest power plant builder, said third-quarter sales advanced 11 percent on orders for trains and power plants.

Revenue through December increased to 4.56 billion euros ($5.93 billion) from 4.1 billion euros a year earlier, the company, based near Paris, said today in a statement. Analysts surveyed by Bloomberg predicted 4.67 billion euros. Orders totaled 6.12 billion euros beating estimates.

With an order backlog of 47 billion euros, or 2 1/2 years of sales, Alstom has the clearest view of its performance ahead in the industry, Deutsche Bank analyst Martin Wilkie said in a Jan. 16 note. The company’s power plant business will be hit by project delays related to the global economic decline, while transport and power service should remain “sound” Alstom said.

“The long-term perspectives for our markets remain strong,” Chief Executive Officer Patrick Kron said in the statement. “In the short term, demand should remain strong in the transport and power services divisions, while the postponement of some projects linked to the economic and financial situation may impact the power systems unit.”

Alstom reiterated its forecast for operating profit equal to 9 percent of sales by March 2010. It predicted a 10 to 11 percent margin at its power systems and service units and 7 to 8 percent in transport.

Alstom, the world largest train maker, has fallen 54 percent in the last six months in Paris trading on concern the world financial crisis may hurt large energy projects. German rival Siemens AG has lost 41 percent during the period.

Orders Climb

Revenue for the first nine months of the financial year increased 12 percent to 13.5 billion euros with 21.5 billion euros of orders received.

The Power Systems divisions booked orders for gas turbines in Spain, the Netherlands and Armenia and a 500 million-euro hydroelectric plant in Brazil. Contracts at the transportation division increased 20 percent to 7.4 billion euros in the first three quarters, the company said.

Revenue and order intake will probably slow starting in the next quarter as falling energy demand from industrial companies hurts orders for power equipment, Michel Marguier of ING Bank said in a December report.

Some private clients in the renewable energy industry will probably postpone projects as it becomes more difficult to get financing, Joe Kaeser, chief financial officer at rival Siemens AG, said on Jan. 14. Alstom entered the wind-energy market in 2007 after buying Ecotecnia of Spain for 350 million euros.

Kron is pushing for a merger with state-owned nuclear reactor maker Areva SA to boost growth as the French government weighs options to help the nuclear company expand amid a global atomic power revival. Areva CEO Anne Lauvergeon has said she opposes a merger.

To contact the reporter on this story: Ross Larsen in London at rlarsen2@bloomberg.net