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GE’s earnings, profits fall, shocking many
BY STEPHEN SINGER The Associated Press

    HARTFORD, Conn. — General Electric Co. Chief Executive Officer Jeff Immelt was expected to tell the world Friday how the conglomerate’s global strategy had paid off and allowed it to ride out the credit crisis.
    Instead, he found himself defending the company’s business model after GE shocked investors with lower-than expected earnings and a profit warning that wiped $46.9 billion off GE’s value and sent the overall market slumping.
    Fairfield-based GE, which typically hits its targets, reported that profit fell 6 percent, to $4.3 billion, or 43 cents per share, from $4.57 billion a year earlier. Earnings from continuing operations came to $4.4 billion, or 44 cents per share, down 8 percent.
    That was well below the 51 cents per share expected by analysts surveyed by Thomson Financial for profit from continuing operations. The company itself had forecast a profit of 50 cents to 53 cents per share.
    GE shares tumbled nearly 13 percent to end the day at $32.05, with about seven times as many shares traded as normally change hands.
    There were bright spots in General Electric’s results.
    GE’s infrastructure business, which makes locomotives, water treatment plants and other large products, such as electrical turbines, again generated strong revenue and profits. The unit, which has been a consistent money maker for GE, produced a revenue gain of 23 percent for the quarter and profi t was up 17 percent.
    Part of GE Infrastructure is GE Energy, which has operations in Schenectady.
    “GE Energy continues to achieve strong global growth, reporting $5.6 billion in revenues for the first quarter of 2008, an increase of 21 percent over the first quarter of 2007,” said Daniel Nelson, public relations manager for General Electric’s Schenectady facility. One of the reasons for this growth is GE Energy’s diverse portfolio of products and services, and our ability to meet our customers’ global needs.
    “This performance reflects the continuing commitment of the GE Energy team to supply the highest quality products and services to help meet the world’s growing energy needs.
    “Wind projects across the U.S. and turbine orders in emerging regions worldwide continue to drive much of this growth.”
    One analyst said this is a typical pattern with the corporate giant.
    “Typically, with GE you get one or two businesses that outperform and one or two that underperform,” said analyst Matt Collins at Edward Jones in St. Louis. “In the end, it turns out to be balanced.”
    This quarter, however, four of six businesses were below expectations “and infrastructure was not enough to make up for the difference,” he said.
    The company blamed disruptions in its financial business late in the quarter for its inability to advise Wall Street in advance about the deterioration in its earnings. Executives faced tough questioning from analysts in a conference call.
    Steve Tusa, an analyst at JPMorgan, told GE executives that “it makes it hard for investors, especially in this environment, to have conviction, I think, that you guys really are a safe, reliable growth company — which is kind of the core of the value proposition you guys have put forth to the investment community.”
    Immelt blamed the financial service market for part of the trouble and defended GE.

GE stock has really been down from what it was since the last stock market drop in the 90's. I remember GE stock selling for $50 a share in the 90's and $100 a share b4 their last split.