Alstom plunges as it slashes outlook second time in 2026

By Hugo Lhomedet

Nov 2 (Reuters) - French train maker Alstom cut its full-year outlook again on Monday, after execution problems on major projects in Germany drove half-year profitability sharply lower and pummelled cash flow, which sent its shares plunging 30% in early Paris trading.

The warning came less than seven months after Alstom scrapped a three-year free cash flow target and cut its margin outlook, blaming delays and execution issues on major rolling-stock contracts.

The group said its adjusted core profit margin was around -4% in the first half of the financial year, compared with +6.4% a year ago, as it lowered its full-year forecast to around 1% from an earlier 6.5%.

It also cut its free cash flow target for the year to an outflow of €1.5 billion ($1.7 billion), having previously guided for a positive result, and launched a plan to reduce debt by around €2 billion.

The setback was centred around the Coradia Max programme, a series of regional trains ordered by German states that had been expected to drive production growth this year.

Alstom said technical issues and additional testing requirements had extended the certification timeline for the trains, delaying deliveries and weighing on profitability. The problems also led to additional work and schedule overruns on some projects, it added.

Citi analysts estimated that the negative cash flow forecast was equivalent to roughly 20% of Alstom's market capitalisation. The stock has lost 54% of its value in 2026, including Monday's drop.

"Given the size of the cash warning, and limited details on the de-leveraging, we'd expect a significant negative reaction to the shares," Citi said in a note ahead of market open.

The train maker cut its annual production target to around 4,000 rail cars, from a range of 4,400 to 4,500 previously. It now sees low- to mid-single-digit percent organic sales growth, against a previous forecast of around 5%.

($1 = 0.8948 euros)

(Reporting by Hugo Lhomedet in Gdansk, additional reporting by Diana Mandia, editing by Milla Nissi-Prussak)