Alstom Shares Fall Sharply After Second Profit Warning on German Project Delays

Guidance cuts and share reaction

French train maker Alstom cut its full-year outlook for the second time in 2026 on Monday, November 2. It now expects an adjusted operating margin of about 1 percent, down from a previous 6.5 percent. Free cash flow is forecast as an outflow of €1.5 billion, compared with earlier guidance for a positive result. Organic sales growth was lowered to 2-4 percent from about 5 percent. Train car production is expected at around 4,000 units, down from 4,400-4,500. Shares fell as much as 28 percent in Paris trading, bringing the year's decline to more than 50 percent.

The company reported a first-half adjusted margin of around -4 percent, against +6.4 percent a year earlier. Orders reached €11 billion and sales rose 3 percent to €9.3 billion, but profitability and cash flow deteriorated. Alstom plans to reduce debt by about €2 billion through asset sales and other measures.

German project issues

The problems center on the Coradia Max regional trains ordered by German states, including Baden-Württemberg and Lower Saxony. Industrialization challenges and delays in securing approvals led to penalties and schedule overruns. The projects were expected to drive production growth this year. A review of key contracts identified additional work requirements. This is the second major warning under CEO Martin Sion, who took the role in April. The first cut in April had already triggered a roughly 30 percent share drop.

Implications

Citi analysts noted that the cash outflow forecast equals roughly 20 percent of Alstom's market capitalization. The company will report full first-half results on November 17. The repeated execution issues on major rolling-stock contracts raise questions about the pace of any operational turnaround and the company's ability to meet debt reduction targets while managing delayed German deliveries.