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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (30649)	4/13/2008 5:50:37 PM
From: Spekulatius	Respond to of 78748

Madharry, i share you concern that the credit freeze is an excuse. If the last 2 weeks were indeed what's causing the problem it must mean that the quarter was backend loaded (a lot of deals needed to get done) during the last 2 weeks. The math is simple: each quarter has 121+ Days so 14 Days / 2 weeks of that is 11.5%, so assuming business ground to a halt there would have been an 11.5% revenue shortfall, which theoretically could have caused a 20% earnings reduction. However that would be the extreme assumption that business went to zero, which i think is quite unlikely. Also it looks like both commercial finance and GE money had revenue increases of 7% YoY . The quarter before commercial finance was up 9% (revenue and earnings) and GE money 22%, so it seems that commercial finance slowed only little and GE money much more so. Then we also have shortfalls in industrial, healthcare and NBC which are not directly credit related. Based on the above numbers , it seems like margin pressure in the financial sector is much more to blame than revenue and we also have slower growth in industrial NBC and healthcare. So it seems that a lot of GE business are under siege now and quite likely we'll hear more bad news. it would not surprise me to see this stock quoted with a 2 as a first number down the road. Also a lot of institutions are holding GE and will now have to decide what to do. they probably got caught at the wrong foot, like the rest of us so i expect that significant selling pressure may be present during the next few weeks.