Alstom is in focus Wednesday after the French engineering firm announced plans to raise between €1 billion ($1.35 billion) and €2 billion from the sale of assets, including a stake in the unit that makes the high-speed TGV and Eurostar trains.
It also said it will speed up a cost-cutting plan after booking fewer orders in the first half of the year than in the same period a year ago.
During the third quarter, Alstom booked orders worth €9.43 billion, down from €12.13 billion in the same period a year ago as demand in emerging markets weakened for Alstom’s turbines and other equipment for power plants, the company said.
The company said net profit fell 2.8% in the first half to €375 million from €386 million in the same period a year ago. Sales fell to €9.73 billion from €9.75 billion.
Still, the announcement of a new cost saving program and an asset sale plan “should ease some market concerns around the company, following a somewhat weak free cash flow performance” in the first half, said Citigroup.
And investors seem to agree. The company’s shares have climbed over 5% in early trade Wednesday.
In a week of European banking news, Dutch bank ING announced Wednesday it had agreed with European Union competition authorities to speed up its restructuring plan after experiencing problems finding a buyer for its Japanese business.
The unit will now be integrated into ING’s European insurance business, which is being readied for an initial public offering in 2014. As a result, the restructuring now will be completed by the end of 2016, two years earlier than previously planned, ING said.
ING was ordered by the EU to sell its global insurance arm to get approval for a government bailout received in 2008.
At the same time the Dutch lender posted a sharp drop in net profit for the third quarter to €101 million ($136 million), compared with €659 million a year earlier, as the bottom line was hit by a €950 million loss on the sale of the bank’s South Korean insurance business.
However, underlying profit, which excludes the impact from divestments and other special items, rose 8.3% to €1.22 billion, ING said.
Shares in the bank have climbed over 4% Wednesday. The plan to put the Japanese insurance business into the European IPO is a smart move, according to Rabobank analyst Cor Kluis. The unit might have fetched only €400 million in a forced sale but will warrant a higher valuation through the IPO , he added.
Shares in easyJet climb over 2% Wednesday after the budget airline reported a solid 5.4% rise in the number of passengers carried in October compared with the same month last year.
In addition, the load factor, the number of passengers as a proportion of the number of seats available for passengers, came in at 89.1%, a rise of 0.7 percentage points compared with October 2012.
These numbers will likely come as a relief to investors, as rival Ryanair on Monday cut its full-year net profit guidance, blaming continued lower average fares.
On Oct. 3, easyJet raised its pretax profit guidance for fiscal 2013 to between £470 million ($753.56 million) and £480 million, from previous expectations of £450 million to £480 million.
However, the news wasn’t universally good for easyJet Wednesday. U.K.-based banking giant HSBC downgraded its investment recommendation for the airline to underweight from neutral, citing near term deteriorating revenue momentum.
“Long term, we think competitor moves to adopt similar product and marketing to easyJet are unlikely to match the U.K. business's execution, but will reduce differentiation between the companies in the eyes of consumers,” said HSBC, in a note to clients.
The bank also pointed out that easyJet’s shares are up more than 90% over the past 12 months, so some consolidation may be in order in the near future.
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