Shares of French train manufacturer Alstom plummeted by up to 38% on Thursday after the company slashed its free cash flow forecast.
In unaudited half-year results released on Wednesday evening, the company said its free cash flow had fallen from negative 45 million euros ($47 million) to negative 1.15 billion euros. It also said it now expects free cash flow in a range of negative 500-750 million euros for the full year, compared to a prior forecast of "significantly positive."
Trading of Alstom shares was briefly suspended at the open of the Paris Stock Exchange. Losses had pared to roughly 21% by Thursday afternoon.
The fall puts the company on course for its worst trading day in at least 20 years, according to LSEG data. The initial share decline wiped roughly 2.9 billion euros ($3.1 billion) from Alstom's market value, Reuters reported.
"Supported by a positive market momentum, Alstom is accelerating on its organic growth trajectory. We are engaged in a steep ramp-up, in particular in the rolling stock activity. This, combined with legacy projects being finalized at the same time, is weighing on the free cash flow in this first half," the company said in a statement.
Analysts suggested there were no liquidity concerns at the company but said there was a track record of free cash flow volatility, with Deutsche Bank describing the latest update as a "major blow" to management credibility.
Alstom has in part struggled with the integration of Bombardier Transportation, which it acquired in 2021.
UBS analyst Supriya Subramanian said in a note that free cash flow was the "key miss" from the Wednesday update, while Alstom orders and sales also came in below expectations.
Subramanian nonetheless reiterated a 12-month "buy" rating on the stock and projected improvements for the second half of the year, including an easing of production challenges.