Alstom Swings to Profit Buoyed by Capital Gains

By Inti Landauro

PARIS--French train and rolling stock maker Alstom SA (ALO.FR) on Wednesday reported a large net profit for its fiscal year 2016 after booking capital gains on assets it sold to General Electric Co. (GE), lifting it from a year-earlier loss.

Alstom said it made a net profit for the fiscal year ending March 31 of 3 billion euros ($3.41 billion), compared with a EUR719 million net loss in the same period a year earlier.

Most of the profit came from the capital gains Alstom made on the sale of a series of assets to GE, the company's Chief Executive Henri Poupard-Lafarge told reporters.

The company had attributed the year-earlier loss to a $772 million settlement with the Department of Justice to resolve corruption cases and the write-down of assets in Russia.

Excluding one-time charges and capital gains, Alstom's operating profit during the fiscal year ending in March rose 23% to EUR366 million, up from EUR298 million last year.

The maker of TGV bullet trains said it booked a record EUR10.64 billion of orders, up over 6% compared with the previous year. Its backlog rose to EUR30.36 billion at the end of March.

Alstom has focused last year in the train business after selling its power equipment division, which represented a little more than 50% of its sales, to its U.S. rival GE.

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 GE EUR700 million for its train-signalling business.

Alstom transferred EUR3.2 billion of the sale proceeds to its shareholders late last year.

-Write to Inti Landauro at [e-mail]

(END) Dow Jones Newswires

May 11, 2016 01:38 ET (05:38 GMT)

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