GE Profit Falls 42 Percent
October 17, 2009 by Mark Ellis
Filed under Business
General Electric has posted a quarterly decrease in profit of 42 percent, a result that, while disappointing in and of itself, actually marks an improvement from what analysts predicted for the massive company. In fact, GE’s results showed that its important industrial business is showing signs of recovery, hitting a record $174 billion backlog of equipment and services orders.
The company’s quarterly revenue was smaller than analysts expected, but the strong performance of its industrial and media businesses helped to stave off GE’s current main weakness, its GE Capital financial division. GE’s results sent its shares down 5.5 percent, or 92 cents per share, to $15.87 in recent trading. While GE’s stock hit an 18-year low in March, it has recovered smoothly and is currently up 4 percent for the year.
The financial crisis has had a dramatic impact on GE Capital, which posted an 87 percent drop in quarterly profits to $263 million, even after including a tax benefit. However, GE has stated that its plans to shrink GE Capital have worked more quickly than expected, leading to a larger-than-forecasted decrease in the division’s revenue.
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