BOSTON (Reuters) - Shares of General Electric Co fell more than 6 percent on Tuesday, after a stock analyst said the U.S. conglomerate's profit could rely more heavily on tax benefits than Wall Street expects.
Barclays Capital analyst Robert Cornell wrote in a note to clients that as much as 20 cents of the U.S. conglomerate's forecast fourth-quarter profit of 36 cents to 42 cents per share could come from tax benefits.
That target range, which GE spelled out to investors in December, includes restructuring charges.
Analysts, on average, look for the company next week to report a fourth-quarter profit of 38 cents per share, including restructuring charges, according to Reuters Estimates. Factoring out charges, Wall Street looks for 51 cents per share.
"Although a negative tax rate may be in expectations, we aren't sure if the Street is prepared for a contribution of this magnitude," Cornell wrote in a note to clients. "Given the difficult earnings report in (the fourth quarter), we think Moody's could take their outlook from stable to negative."
Both Moody's Investors Service and Standard & Poor's assign their top-shelf triple-A ratings to GE's debt, though last month S&P lowered its outlook on the world's largest maker of jet engines and electricity-producing turbines to "negative," meaning it had a 1-in-3 chance of losing that ranking over the next two years.
GE has successfully sold $29 billion in bonds since then, putting it more than halfway toward its 2009 target of raising $45 billion on the debt markets, which it plans to use to pay off bonds maturing in 2009 and reducing its reliance on short-term commercial paper.
Shares of the Fairfield, Connecticut-based company declined 98 cents to $14.85 on the New York Stock Exchange.
Over the past year, GE shares have fallen about 55 percent, a more dramatic fall than the 32 percent slide of the Dow Jones industrial average <.DJI> and the 37 percent decline of the S&P 500 index <.SPX>.
(Reporting by Scott Malone, editing by Dave Zimmerman)