GE's big miss shocks market

By Charley Blaine and Elizabeth Strott

First-quarter profits are not shaping up to be pretty. General Electric (GE, news, msgs) this morning reported a 6% decline in first-quarter profit.

GE earned $4.3 billion, or 43 cents per share, down from $4.57 billion, or 44 cents per share, in the first quarter of 2007. Earnings from continuing operations were a penny better, at 44 cents per share, but analysts had expected GE to earn 51 cents per share.

Shares of GE, a Dow stock. slumped $4.22, or 11.5%, to $32.53 in midday trading, sending the overall markets lower. At 1 p.m. ET, the Dow Jones Industrial Average was down 173 points at 12,408. The Nasdaq Composite Index had lost 40 points to 2,311, and the Standard & Poor's 500 Index was down 18 points at 1,338. Light, sweet crude oil was down $1.08 to $109.03 a barrel.

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It was the biggest one-day drop for GE since the stock market crash in October 1987.

GE cited "a slowing U.S. economy and difficult capital markets" for the decline in profit. Revenue at GE rose 8% to $42.24 billion in the first quarter.

"Our primary shortfall was a decline in financial services earnings. 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 a press release. "Our inability to complete these asset sales and higher mark-to-market losses and impairments impacted earnings by 5 cents per share."

GE provides a wide range of industrial products, including aircraft engines, power-generation equipment, security technology and health-care products. It also provides consumer financing and owns the NBC broadcast network.

from : http://articles.moneycentral.msn.com/Investing/Dispatch/080411markets.aspx