Power engineering and train company Alstom SA (ALO.FR) Thursday said
orders should continue to improve after picking up in its fiscal third quarter,
and confirmed its guidance for this fiscal year and the next.
The fresh evidence of recovering orders, especially for the company's power
equipment business, contrasts with a long recent spell of morose demand in the
sector. Analysts have consistently identified an improvement in power orders as
a key potential driver of an increase in Alstom's share price.
Alstom, whose products range from turbines for power stations to high-speed
trains, said orders booked over the fiscal third quarter rose 30% to EUR5.49
billion from EUR4.22 billion a year earlier, beating an average expectation of
EUR5.2 billion from a Dow Jones Newswires poll of four analysts.
The big-ticket power orders on which Alstom thrives have been thin on the
ground recently as utilities have held back from making large investments. However,
Chief Executive Patrick Kron said Alstom's fiscal third-quarter performance
amounted to "the best quarterly intake since July 2009."
"This commercial improvement should gain momentum in the fourth quarter,
with order intake expected to show a new increase," Kron added.
Following on from the "very low point" of the first half of this
fiscal year, Alstom said power orders "rebounded" during the third
quarter.
"Main successes were recorded in emerging markets, mainly in
Asia
,
where the demand for new equipment was robust," the company said.
Bernstein, in an investor note, described Alstom's third-quarter order numbers
as reassuring and said that demand appeared to be stabilizing.
Alstom said sales for the three months to Dec. 31 rose to EUR5.24 billion from
EUR4.69 billion a year earlier, beating an average forecast of EUR5.14 billion
from the survey.
Alstom's acquisition last year of a new power grid unit from Areva SA (CEI.FR)
provided a major year-on-year boost to sales and orders.
Alstom also confirmed its guidance, according to which its overall operating
margin should be between 7% and 8% for the current and next fiscal years.
Shares of Alstom have rallied recently, outperforming the CAC-40 index over the
past three months, as a series of new orders has fuelled optimism that demand
in the power sector may be picking up after a long spell in the doldrums.
At 1350
GMT, shares of Alstom traded up 3.8% at EUR41.38.