General Electric’s (GE) first-quarter profit took a hit following increased consumer-credit defaults at GE Capital.

But the company’s overall earnings decline wasn’t as sharp as analysts feared, thanks to a 19% increase in profits from turbine sales. The company says backlogged orders remain strong.

Losses at GE Capital have forced the company to slash its dividend for the first time in 60 years and to lose its prized Triple-A debt rating. Both announcements jolted Wall Street, because GE has long been regarded as a strong, stable investment.

GE’s first-quarter profit fell 35%, to $2.83 billion, or $0.26 per share, from $4.35 billion, or $0.43, for the same period last year. Analysts expected the company to earn $0.21 a share.

GE Capital includes middle-market company lending, private-label credit cards, real estate and aircraft leasing – all hit hard by the recession. The division’s income fell 58% to $1.12 billion.

GE’s consumer-related divisions also took a hit in the first quarter. GE holds an 80% interest in NBC Universal. Revenue from TV and movie operations fell 45% and revenue declined 2%. The company blamed the weak advertising market and fewer DVD releases than a year ago.

Profit at GE’s home appliance division fell 75% and revenue declined 22% as consumers cut back on major purchases. The company no longer plans to sell or spin off the division.

However, CEO Jeff Immelt says the company won’t have to raise additional capital to get through the current economic downturn, the Wall Street Journal reports.