GE Shocks Market with Profit Drop, Shares Tumble - By the Numbers (
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BY THE NUMBERS
GE, which also has media and finance arms, reported a profit of $4.3
billion, or 43 cents per diluted share, compared with $4.57 billion, or
44 cents, a year earlier. Revenue rose 7.8 percent to $42.24 billion.
The sharpest drop in segment profit came at the conglomerate's
financial divisions, with commercial finance down 20 percent and GE
Money consumer finance down 19 percent. GE's finance arms make
commercial and consumer loans, including financing purchases by
corporations and individuals.
Profit at GE's industrial unit, which makes things like lighting and
appliances, fell 16 percent and health care was down 16 percent.
Those declines overshadowed a 17 percent rise in profit at the
infrastructure unit, which has been boosted by emerging-market demand
for heavy equipment like electricity-producing turbines. NBC
Universal's profit rose 3 percent.
"I thought they'd be doing better on the industrial and
infrastructure side of things, thought that (would) have been enough to
get over the hump," said Mike Gandrud, senior analyst at Optique
Capital Management.
Goldman Sachs cuts its rating on the shares to "neutral" from "buy" on the news.
The company cut its full-year profit forecast from continuing
earnings to a range of $2.20 to $2.30 per share. It warned that it
foresees profit declines in the second quarter and through the full
year at its financial services arms.
The new full-year earnings forecast, which calls for profit to be
flat to up 5 percent, compares with an earlier view of "at least" 10
percent. Many on Wall Street had viewed that as a conservative forecast.
Revenue in the United States fell 5 percent in the quarter, with the
pain stretching from the finance arms into the consumer-oriented
appliance business, he said. Outside the United States, revenue was up
22 percent, Immelt said.
"We felt like it was wise to revise guidance for the remainder of
2008 to reflect today's market realities," Immelt said. "We are really
assuming no improvement during the year."
(Additional reporting by Jennifer Coogan and Nick Zieminski in New
York, Sitaraman Shankar in London and Blaise Robinson in Paris; Editing
by Derek Caney)
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