GE Q1 earnings fall 36%, hurt by finance

WASHINGTON -- GE, which has a stake in almost every sector of the economy, from light bulbs to locomotives, posted earnings from continuing operations of $2.92 billion or 26 cents per share. That surpassed the 21 cents per share forecast by analysts.

Shares of the Fairfield, Conn.-based company rose 44 cents, or 3.7%, to $12.27 in pre-market trading.

After paying preferred dividends, GE's net income totaled $2.74 billion, down from $4.30 billion, or 43 cents per share, a year earlier.

Revenue fell 9% to $38 billion, with sales down or flat in every division except GE's energy business. The broad recession has hurt many of GE's industrial businesses that make products like jet engines, oil field equipment and household appliances. Sales also declined at GE's entertainment division, which includes the NBC television network.

Earnings at GE Capital fell 58%, but still amounted to $1.12 billion, holding to GE's prediction last month that the segment would be profitable despite growing losses on its loans in areas like credit cards and commercial properties. The company said Friday that the unit is on track to turn a profit in 2009 despite its woes.

Jeff Immelt, GE's CEO, said the company still believes it won't have to raise new capital to prop up GE Capital. That has been a major worry for investors and contributed to a steep slide in GE's share price earlier this year.

GE gave investors an exhaustive review of GE Capital's finances in March in an attempt to rebuild confidence following a 60% slide in share prices from the start of the year. The company has warned that GE Capital, which once made up about half of GE's profits, could break even this year if the economy continues to worsen. But GE also said it wouldn't have to plug more money into GE Capital, which has helped the share price recover somewhat.