Alstom SA share price up, projects rising full-year sales and seals energy assets deal with General Electric

Alstom SA said that its expects full-year sales to increase after a record order intake.

According to the companys statement, Alstom projects its sales to increase at a “high single digit” rate while its operating profit margin is likely to exceed 5%.

The companys forecast excludes the energy-equipment assets, which Alstom is currently selling to General Electric Co. in an attempt to become more focused on its train-making business. In June 2014 Alstom reached a €12.35-billion ($15.5-billion) agreement with General Electric over its energy assets.

The Chief Executive Officer of France-based Alstom – Mr. Patrick Kron said in a statement: “The project with General Electric is progressing well. After completion of this transaction, the group will focus on its transport business with positive perspectives for sales growth and operating profit improvement.”

Alstom reported that net profit in the period between April and September fell by 32% from €375 million in the same period a year ago to €255 million ($319 million). The companys sales increased by 13% from €2.7 billion to €3.06 billion.

Apart from announcing the companys expectations for its full-year performance, the companys chief executive also shared that the final agreements with General Electric were signed by Alstom after the consultations between the two companies were finalized. Shareholders will vote on the deal on December 19th.

Some of the proceeds generated from the energy assets sale are planned to be used by Alstom for the expansion of its train-making and rail unit. The company also considers to reduce its debt and reward shareholders, as well as to create energy ventures with General Electric.

Alstom SA added 0.99% to trade at €28.16 per share at 10:20 GMT in Paris, marking a one year change of +3.93%. The company is valued at €8.63 billion. According to the Financial Times, the 15 analysts offering 12-month price targets for Alstom SA have a median target of €31.00, with a high estimate of €35.00 and a low estimate of €18.00. The median estimate represents a 11.19% increase from the previous close of €27.88.