By Scott Malone
BOSTON (Reuters) - General Electric Co's
The company said on Friday that net profit fell 22 percent, weighed down by a 33 percent drop at GE Capital. Those declines outstripped growth at its infrastructure arms, which were buoyed by solid demand for electricity-generating turbines and jet engines.
"We are on track to meet our September 25 revised guidance for the full year," said Chief Executive Jeff Immelt, in a statement. That guidance allows for a profit drop of up to 12 percent for the year.
The U.S. conglomerate posted earnings of $4.31 billion, or 43 cents per diluted share, down from $5.56 billion, or 54 cents per diluted share, a year earlier.
Profit from continuing operations came to 45 cents per share, matching the average Wall Street estimate as compiled by Reuters Estimates. On that basis, GE late last month cut its outlook to between 43 cents and 48 cents per share from a previous range of 50 cents to 54 cents.
"There's not a lot of warm comfort here but it's a good report," said Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisors in Cincinnati. "There was nothing horrific on the finance side."
Revenue rose 11.1 percent to $47.23 billion.
GE said it would keep its annual dividend steady at $1.24 per share next year and that it ended the quarter with $88 billion in commercial paper outstanding.
Its shares were little changed in pre-market trading, gaining a penny from their close of $19.01 on the New York Stock Exchange. That is less than half GE's share price when Immelt took the helm in September 2001.
"What the results show is that the wheels are not off the bus," said Daniel Holland, analyst at Morningstar in Chicago. "What was priced into the market was that the wheels were falling off."
This has been a tough year for the Fairfield, Connecticut-based company, which is regarded as an economic bellwether because of the size and diversity of its operations.
CEO Immelt has moved to scale back GE's exposure to financial services, including selling its Japanese consumer finance arm, with an eye toward generating just 40 percent of its profit from GE Capital by next year.
But with the financial sector deep in a crisis that has already claimed storied Wall Street names including Bear Stearns Cos and Lehman Brothers Holdings Inc
Last month GE officials said they likely would not be able to sell the $30 billion U.S. private-label credit-card unit that had been on the block since December.
Earlier this month, GE sold an additional $15 billion in shares -- including $3 billion to billionaire investor Warren Buffett's Berkshire Hathaway Inc
The company's shares have lost almost half their value in 2008, a steeper drop than 35 percent slide of the Dow Jones industrial average <.DJI>.
(Additional reporting by Nick Zieminski and Ryan Vlastelica in New York; Editing by Derek Caney)
