By the NumbersBy Reuters - | Posted 2008-04-11 Email Print
GE's profit numbers are down. The market reacts.
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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