Alstom Seen Cutting Dividend 17% After Earnings WarningTodd White
Alstom SA may cut its dividend 17 percent, according to data compiled by Bloomberg after the French maker of power equipment last week reduced its forecasts for operating margins and cash flow.
The annual dividend estimate was lowered to 70 euro cents (96 U.S. cents) a share from 84 euro cents by analysts at Bloomberg Dividend Forecasting. Alstom last paid 84 cents. The company, based near Paris, said it decreased its forecasts for cash flow and margins because of weaker-than-expected sales.
Chief Executive Officer Patrick Kron said last week the new outlook “doesn’t give a favorable ground for a positive decision on the dividend” to be made in May. Alstom has lost about 20 percent of its market value since the Jan. 21 announcement, compared with a 5 percent drop in the Euronext Paris CAC Industrials Index to which it belongs.
The company, whose competitors include Siemens AG and General Electric Co., may need to consider increasing the size and speed of its planned asset disposal program, according to data compiled by Bloomberg. That’s because full-year free cash flow probably will be at least 520 million euros weaker than its initial expectations, according to a note published by Heenal Patel, an analyst with Bloomberg Industries.