ALO Alstom

By Inti Landauro

PARIS--French engineering firm Alstom SA (ALO.FR) Thursday said its net profit in the six-month period through September fell to 18 million euros ($19.6 million) from EUR29 million on costs related to the sale of most its power equipment division to rival General Electric (GE).

The company said its sales revenue rose 8% during the period to EUR3.3 billion, while its operating profit rose 10% to EUR167 million. Alstom only reported data for its train unit as it sold most of its other businesses to GE.

During the period, Alstom booked orders worth EUR3.9 billion, which boosted its backlog to EUR27.8 billion, from EUR26.9 billion a year earlier.

The company excluded its turbine business from the earnings report after most of it was sold to GE. The operation, which took 18 months, was closed earlier this week. Alstom said extra costs associated with the sale weighed on its bottom line.

Alstom sold its power equipment making unit to GE for a nominal price of EUR12.4 billion, but will retain minority stakes in part of the business worth EUR2.4 billion. Alstom will then pay EUR700 million to GE for its train-signaling business.

The sale illustrated how Alstom was forced to exit the competitive market for turbines and focus instead on trains as the size of its balance sheet didn't allow it to compete on an equal footing with larger rivals.

Following the transaction, Alstom will hand over EUR3.2 billion to shareholders through a share-buyback operation. Patrick Kron, the company's chief executive and chairman, said he will retire after the buyback operation is concluded. He will be replaced by Henri Poupart-Lafarge, who previously led Alstom's train business.

Write to Inti Landauro at inti.landauro@wsj.com

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(END) Dow Jones Newswires

November 05, 2015 02:42 ET (07:42 GMT)

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