General Electric (GE) posted a net profit that's down 35 percent from last year, but beat Wall Street expectations. Wall Street expected a 21 cents per share profit and GE posted a profit of 26 cents per share. Revenue for GE fell 9 percent to $38.4 billion. Analysts forecast revenue to hit $39.8 billion. So GE beat expectations mainly due to its cost cutting moves.
The division everyone was watching, GE Capital, earned $1.1 billion and the company said it expects the division to be profitable for the full year.
DailyFinance's Tim Catts wrote yesterday that, "Investors will likely inspect GE Capital's results closely. The company has said the unit will be profitable this quarter, but a one-time tax benefit deserves much of the credit for that. After giving the world a glimpse of GE Capital's books last month, CEO Jeff Immelt and CFO Keith Sherin may face some pointed questions if things have deteriorated."
GE CEO Jeff Immelt told CNN that even though revenues and profitability declined year-over-year in the financial services business and delinquencies were rising, "we have taken prudent actions to address these challenges, including tightening risk requirements, improving liquidity and reducing leverage." He also said that GE has a strong credit rating and the company's "outlook is stable."
As Catts expected, the prospects for GE's industrial businesses is mixed. Sales of some of the company's products, from jet engines to medical equipment, will likely fall as the recession forces its customers to cut back purchases.
GE shares were up in premarket trading.