Static at General Electric(surprise decline in earnings and lowered forecasts)

CNN ^ | 04/11/08 | David Goldman

[TigerLikesRooster]

Static at General Electric

Conglomerate's shares tumble on surprise decline in earnings and lowered forecasts.

By David Goldman, CNNMoney.com staff writer

Last Updated: April 11, 2008: 9:46 AM EDT

NEW YORK (CNNMoney.com) -- General Electric posted a surprising first-quarter earnings miss Friday, deflating investors' hopes that the conglomerate could rise above an economic slowdown.

Shares of GE - a Dow Jones industrial average component - tumbled more than 11% in early morning trading, and the results sent stock market tumbling.

GE's (GE, Fortune 500) reported net income fell 6% to $4.3 billion after reporting income of $4.6 billion in the first quarter of 2007.

Earnings from continuing operations were 44 cents per share, down from 48 cents per share a year earlier and well below the 51-cent-a-share consensus forecast of analysts polled by Thomson Financial.

Sales rose 8% to $42.2 billion, which missed analysts' forecast of $43.7 billion. A year ago, GE reported revenue of $39.2 billion.

GE has typically been a model of consistency, rarely missing - or beating - estimates. Only once since the start of 2006 has GE failed to deliver earnings that exactly met First Call's forecast, according to the earnings tracker. That was in the second quarter of 2007, when it beat the earnings per share forecast by a penny.

With businesses in a multitude of sectors, such as health care, finance, energy, consumer electronics, industry and media, many consider GE to be a barometer for the health of the U.S. economy.

Poor environment dooms earnings

But even with strong exposure in markets overseas, the multi-faceted corporation could not avoid taking a hit to its financial services division amid a U.S. credit crisis.

[TigerLikesRooster]

Ping!

[TigerLikesRooster]

U.S. stocks drop sharply on GE's disappointment

[Aggie Mama]

But sales still rose 8%...What if their forecasts were just wrong. If my husband’s company had increased sales of 8% over last year, I’d be a happy camper.

[AD from SpringBay]

Maybe they need some more infomercials on the nightly news -something about their great new lightbulbs might help.

[iopscusa]

Sack that idiot CEO...he is stupid enough to buy into the Greenie BS and Al Gore’s crap...he needs to go.

[ncalburt]

Maybe GE should spend more time producing better products and less time USING NBC/MS-DNC as a political propaganda machine to help get Dems elected so there phony Global warming patents get bought by the Feds. They would have a better bottom line!

[BenLurkin]

Ouch!

[2banana]

But sales still rose 8%...What if their forecasts were just wrong. If my husband’s company had increased sales of 8% over last year, I’d be a happy camper.

Contrary to popular belief - GE is really not a manufacturing company anymore. They get most of their profits from their financial arm. That is now getting hammered in the general financial crisis. Sales in manufacturing are doing pretty well - but it will not offset the coming losses from their financial units...

[TigerLikesRooster]

Right. Creating financial arm of GE was Jack Welch’s road to the glory.:-)

[badbass]

But sales still rose 8%...What if their forecasts were just wrong. If my husband’s company had increased sales of 8% over last year, I’d be a happy camper.

This is why I despise having anything to do with (as far as selling for or being employed by) a publicly traded company. It's like being a "rat on a treadmill", trying to keep up with some idiot's "expectations".

[Campion]

GE offshores everything they can, including my job a few years ago. They can go sell their products in India and China; I won’t buy from them.