General Electric (GE) lowered its earnings outlook for the third quarter and full year, citing continued weakness in the financial services sector.

The company now expects to earn $0.43 to $0.48 per share in the third quarter, down from previous guidance of $0.50 to $0.54. For the year, it now expects to earn $1.95 to $2.10 per share, down from $2.20 to $2.30.

“Given the recent dramatic developments in the financial markets, we have made some tough decisions to further reduce risk and strengthen our balance sheet while maintaining our dividend,” Jeff Immelt, Chairman and CEO, said in a prepared statement.

“We have suspended the stock buyback to reduce GE Capital leverage, while still being able to pursue opportunistic acquisitions. We remain fully committed to the Triple-A credit rating, which distinguishes GE,” Immelt said.

Highlights:
 

• GE expects to earn about $20 billion in 2008.
  
  
• Industrial earnings are expected to remain strong in the third quarter, up 10-15%, led by infrastructure businesses, excluding the consumer and industrial sectors.
  
  
• Financial services earnings in the third quarter are expected to be about $2 billion and about $9 billion for 2008.
  
  
• The company plans to maintain a quarterly dividend of $0.31 cents a share, or $1.24 per share annually through 2009.

“Our industrial business fundamentals remain very strong with continued global strength in our core industries,” Immelt said. “Long cycle industrial and service orders are expected to be up double digits in the third quarter.”

GE does business in about 100 nations. Its top competitors include Citigroup (C), Philips Electronics (PHG) and Siemens (SI).

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