By Olivier Sorgho
(Reuters) -French train maker Alstom (EPA:ALSO) on Wednesday reported third-quarter sales below expectations and said it was still studying the possibility of a capital increase to cut its debt pile, sending its shares 7% lower.
The maker of France's iconic TGV trains lost half its market value late last year after it slashed its full-year free cash flow forecast in October, and in November said it would consider a capital increase.
On Wednesday, Alstom said it was still studying the feasibility and potential size of a share sale.
"Keeping everything else equal, statement suggests that capital increase could now be a more likely option than before," J.P.Morgan said in a note to clients.
Alstom will make a decision on a potential equity issue by May 8, Chief Financial Officer Bernard Delpit told analysts on a call.
Its shares were down 7.6% at 0855 GMT, the worst performer on the European benchmark STOXX 600 index.
Sales in the third quarter rose 4.6% year-on-year on an organic basis - which excludes acquisitions, disposals and currency moves - to 4.33 billion euros ($4.70 billion), while orders received were up 6.4% at 5.45 billion euros.
Orders beat analysts' consensus forecast but sales missed expectations, J.P.Morgan and a trader said.
Alstom said its asset sale programme was progressing. It aims to raise between 500 million and 1 billion euros from offloading parts of its business.
"We see a lot of appetite for some of the assets we're working on in terms of disposals," said Delpit, without naming the assets.
Alstom would still need at least 1 billion euros to execute its goal of cutting net debt by 2 billion euros by March 2025.
The sale of its stake in Russia's TMH Limited, which closed in early January, will result in a non-cash loss of around 127 million euros, Alstom said, adding the sale was not part of its debt cutting plan.
The group confirmed its full-year outlook and mid-term targets.
($1 = 0.9206 euros)