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| Jeffrey R. Immelt, 52, is Chairman of the Board and Chief Executive Officer of GE. Immelt, the 9th Chairman in GE's 130-year history, was appointed to this post on September 7, 2001. His father Joseph was a manager of the Aircraft Engines Division and his wife Andrea worked as a GE Customer Service Representative - - The company traces its beginnings to Thomas A. Edison, who established Edison Electric Light Company in 1878. In 1892, a merger of Edison General Electric Company and Thomson-Houston Electric Company created General Electric Company. GE is the only company listed in the Dow Jones Industrial Index today that was also included in the original index in 1896. |
General Electric Co.(GE) one of America's biggest and oldest listed
companies, today reported a 5.8% fall in first-quarter net
income amid weakness in its financial-services operations. GE also
issued a disappointing forecast for the rest of the year, in a
psychological blow to fragile market sentiment.
A bellwether of US corporate activity - owner of GE
Finance, NBC Universal and a leader in power generation and aircraft
engines - reported profits were down
at four of six divisions, with only infrastructure and NBC posting
gains.
GE cut its full-year earnings forecast and now
sees little prospect of growth. In March, CEO Jeff Immelt had reiterated a more optimistic forecast
as recently as mid-March.
The news sent a cold shudder through US and global markets.
In New York, the stock is down 10.4%.
GE announced first quarter 2008 earnings from
continuing operations of $4.4 billion with $.44 per
share, down 8% from first quarter 2007. First quarter
2008 net earnings were $4.3 billion with $.43 per share,
down 2% from first quarter 2007. First quarter revenues
from continuing operations were $42.2 billion, up 8%.
“Demand for our global Infrastructure business
remained strong, but our financial services businesses
were challenged by a slowing U.S. economy and difficult
capital markets,” GE Chairman and CEO Jeff Immelt
said.
“While we are disappointed with our results, the
fundamentals of our businesses are strong.
“Infrastructure had a solid quarter, growing revenues
23% and earnings 17%,” Immelt said. “Oil & Gas, Energy,
Transportation, and Aviation all generated double-digit
profit growth – with no signs of slowing. Infrastructure
orders increased 12%, and we added more than $3 billion
in backlog since last quarter.”
Total orders were $24 billion, up 8%. Major equipment
orders grew 11% to $12 billion. Major equipment backlog
was at $52 billion, an increase of 41%. Services orders
were up 5%, and CSA backlog stood at $110 billion, an
increase of 16% year-over-year.
“Our focus on globalization has helped sustain the
Company during the U.S. slowdown. Global revenues grew
22%, with strength in virtually every business,” Immelt
said. “Developing country growth was 38%, and 14% in
developed countries outside the U.S.
“Nevertheless, we failed to meet our expectations.
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,” Immelt said.
“Our inability to complete these asset sales and higher
mark-to-market losses and impairments impacted earnings
by $.05 per share versus plan.
“Commercial Finance and GE Money remain in good shape
and still earned $2.2 billion in a tough market. Our
balance sheet is strong, portfolio quality is stable and
we are originating business at high margins.
“Our other industrial businesses had mixed
performances. NBC Universal grew segment profits 3%, for
its sixth straight quarter of profit growth,” Immelt
said. “In the Industrial segment, we had strong
performance in Enterprise Solutions, with profit up 15%,
partially offsetting a difficult U.S. appliance market.
Healthcare earnings were impacted by a difficult U.S.
environment and continued regulatory shipping
restrictions on the surgical supplies business.
“In light of what we have seen in the first quarter,
we have revised our earnings outlook for the full year
to protect investors by reflecting a slower economy and
assuming capital markets remain challenging,” Immelt
said. “We are lowering our full-year EPS guidance to
$2.20-2.30 from continuing operations for growth of
0-5%. As a part of this guidance, we expect our
industrial earnings to grow 10-15% and financial
services earnings to decline 5-10%. This range
encompasses any portfolio actions we have announced.
Consistent with this range, our second quarter 2008
guidance is $.53-.55 EPS.”
Full Results
