Shares in French train maker Alstom plummeted more than 35% on Friday after the company slashed its profit forecast and abandoned its free cash flow target for 2026-27. The warning came from new chief executive Martin Sion, who joined from space rocket maker ArianeGroup just weeks ago. Despite record order intakes in the financial year ending March, Alstom reported that profitability "fell short of expectations."

Sion cited slow progress on large rolling-stock projects as weighing on near-term margins and cash flow. The company now expects core profit margins of 6.5% instead of the previously forecast 8-10%. Alstom, which manufactures France's high-speed TGV trains and has secured major contracts including for Eurostar, has faced past challenges with cash flow management and delayed deliveries, though it has improved the profitability of its order backlog.

The profit warning echoes a similar cash flow alert in 2023 that severely impacted Alstom's share price. The company raised capital the following year to reduce debt. Jefferies analyst Lucas Ferhani noted that while industry-wide complexity affects large train projects, "there is clearly room for operational and project execution improvement at Alstom."