GE Says Profit Fell, Citing Finance; Forecast Reduced (Correct)
By Rachel Layne
(Corrects revenue in sixth paragraph to $42.2 billion.)
April 11 (Bloomberg) -- General Electric Co. said first- quarter profit fell 12 percent, missing analyst estimates, because it couldn't complete asset sales and had higher-than- expected losses at its finance businesses due to disruptions in global capital markets. GE cut its full-year forecast.
Profit from continuing operations dropped to $4.36 billion, or 44 cents a share, from $4.93 billion, or 48 cents, a year ago, Fairfield, Connecticut-based GE said today in a statement, trailing the average analyst estimate of 51 cents. GE shares declined in Germany.
GE missed its own forecasts for its commercial and consumer finance units because of an inability to complete planned asset sales and higher mark-to-market losses, the company said in its statement. That cut per-share profit by 5 cents a share, and resulted in a lowered forecast of $2.20 a share to $2.30 a share, down from the at least $2.42 previously forecast.
``We knew the first quarter was going to be challenging, but the extraordinary disruption in the capital markets in March affected our ability to complete asset sales and resulted in higher mark-to-market losses and impairments,'' Chief Executive Officer Jeff Immelt said in the statement.
The U.S. may be near a recession because of a slump in housing prices and a tightening of credit markets. Some members of the Federal Reserve's rate-setting Open Market Committee said at their March 18 meeting that they saw the risk of a ``prolonged and severe downturn'' in the U.S. economy, the world's largest.
Revenue rose 8 percent to $42.2 billion. GE gets more than half its sales from outside the U.S.
GE shares trading in Germany exchanged at $35.32 today, a decline of 4 percent. The company, which trails only PetroChina Co. and Exxon Mobil Corp. in market value, rose 31 cents to $36.75 yesterday in New York Stock Exchange composite trading. The shares have fallen less than 1 percent this year compared with a 7.3 percent decline in Standard & Poor's 500 index.
To contact the reporter on this story: Rachel Layne in Boston at rlayne@bloomberg.net
Last Updated: April 11, 2008 07:00 EDT |
