French industrial power plant and high-speed train group Alstom reported an 11% rise in frst quarter sales on Wednesday due to strong markets for rail transport and electricity generators.
Sales rose to €4.5bn ($7.18bn), meeting analysts' expectations, and it confirmed an operating margin target for around 9% for the year ending March 2010.
The weak dollar eroded first quarter sales by 4%.
Alstom shares jumped as much as 6.3% to €70.24 on relief over the in-line figures and the absence of any warning, and by 8.34am GMT were up 4.7%. while the DJ Stoxx industrials index was up 0.6%.
New orders were down 14% to €6.6bn as the comparison with last year's first quarter was skewed by a large one-off order.
"There is no slowdown, we do not see that with our customers. But I remind you that we are conservative in accounting and only take new orders in our books when a downpayment has been made," Chairman and chief executive Patrick Kron said on a conference call, referring to several projects for which details had yet to be agreed.
"I confirm that our markets remain strong," he added.
Analysts at Natixis said the orders showed a slowdown in Alstom's power business but noted last year's rise was an unsustainable 35%.
DEMAND
The group is riding a wave of demand for big high speed train projects, such as the NTV venture in Italy launched on Tuesday and projects in Argentina and Morocco, as well as a boom in low CO2 emission electricity plants.
High oil prices are boosting both areas and the group is also extending its manufacturing activities outside Europe to counter the impact of a strong euro.
Alstom, in which contruction to media group Bouygues has a 30% stake, is campaigning for a tie-up with state-owned nuclear energy group Areva. The French technology champion skirted bankruptcy some five years ago with a state-orchestrated financial bail-out and had to divest its business making luxury cruise ships and tankers.
It competes with Siemens, Bombardier, General Electric, ABB and Mitsubishi Heavy Industries.
The average forecast from seven analysts polled by Reuters Estimates was €4.53bn.
Alstom said the level of order intake was very satisfactory across all sectors and noted the 14% decline from last year was due to an exceptional order of €2.2bn recorded during the first quarter of 2007/08 for very high speed trains in France.
Alstom said that with strong commercial activity during the first quarter of the fiscal year 2008/09 and good operational performance, the financial situation had been further strengthened.
Alstom shares lost 10% of their value so far this year after a 43% rise over 2007.
By Marcel Michelson, Reuters
