Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

GE Beaten With Its Own Finance Arm

By

Losses by GE Capital, consumer divisions hit first-quarter earnings hard.

PrintPRINT
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.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE