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General Electric posts 35% drop in quarterly profit
GE Capital range up 20% less revenue

By Christopher Hinton, MarketWatch

Last update: 7:19 a.m. EDT April 17, 2009Comments: 2
NEW YORK (MarketWatch) -- General Electric Co. said Friday its first-quarter profit fell 35% on a sharp drop in financial-service related revenue.
For the recent quarter, the Fairfield, Conn., manufacturing and financial services giant said net income was $2.9 billion, or 26 cents a share, down from $4.47 billion, or 43 cents a share, earned in the comparable period last year.
Quarterly revenue amounted to $38.41 billion, down from the prior year's $42.23 billion.
Analysts, on average, had been looking for the Dow Jones Industrial Average component to earn 22 cents a share for the recent quarter, according to data compiled by FactSet Research.
GE (GE:12.27, +0.44, +3.7%) said first-quarter revenue from financial services dropped 20%.
Chairman and Chief Executive Jeff Immelt said first-quarter earnings were "consistent" with the forecast the conglomerate gave last month at an all-day investor meeting.

Shares rose 3.5% in premarket trading to $12.70. The stock fell sharply after global financial markets were rocked by the collapse of Lehman Brothers last September, plunging about 75% to hit a more than 10-year low on March 4 at $5.73.
"Amid a continued weak economy, we're performing well and our backlog remains strong," Immelt said in the release.
The company said equipment and services backlog held "steady," at $171 billion.
Below the first-quarter headline numbers, GE said earnings grew by 19% in energy infrastructure and by 6% in technology infrastructure from the prior year's quarter.
Infrastructure orders for the March quarter totaled $19 billion, down 10%.
GE's capital finance business -- the focus of much investor scrutiny -- had earnings of $1.1 billion in the quarter, and the company said it "remains on track" to be profitable for 2009 as a whole.
During the March investor meeting, executives said 93% of GE Capital's long-term debt is already funded for this year, and with no need to tap any external capital. Further, the company clarified its standing in overseas real estate markets, particularly in the U.K. mortgage unit, which helped relieved some investor fear. See related story.
For 2010, the company plans to raise between $35 billion and $40 billion for the financial unit, and will likely tap the FDIC's Temporary Liquidity Guarantee Program, which backs newly issued unsecured debt.
But trouble could come from the U.S. unemployment rate, which is driving the slump in its real estate business. GE Capital is forecast to post a $5 billion profit in 2009, but that's under the assumption the U.S. employment rate would average at 7.7%. In February that number hit 8.1% and is likely to climb higher, and the unit's profit could be halved under more adverse economic conditions.