General Electric on April 17 reported a 35% drop in first-quarter profit to $2.89 billion, but beat expectations as its financial arm remained profitable. Revenues however fell below expectations, dropping 9% from a year ago to $38.4 billion.
Chief executive Jeff Immelt said the company would slash costs by more than $5 billion in 2009 "to respond to challenging global economic conditions."
"We've reduced headcount and are managing company operations more efficiently," Immelt said.
Immelt said that the first-quarter results were consistent with company forecasts, adding that "amid a continued weak economy, we're performing well and our backlog (of orders) remains strong."
GE's financial services arm, whose increased risk profile from the global financial crisis led ratings agencies Standard & Poor's and Moody's to downgrade GE's AAA rating last month, earned $1.1 billion in the first quarter. Capital Finance earnings were down 58% from the 2008 first quarter. Immelt said Capital Finance "remains on track to be profitable for the full year" after the company took actions to address year-over-year declines in revenues and profitability and rising delinquencies, including tightening risk requirements. "Questions about credit ratings have been resolved. We still have a strong rating and our outlook is stable," he said.
Earnings in the conglomerate's largest businesses, in infrastructure, rose 2.7% to $18.67 billion, with gains of 6% in technology infrastructure and 19 percent in energy infrastructure.
NBC Universal earnings fell 2% to $3.5 billion, "due to a soft advertising market and fewer major DVD releases compared to a year ago," while cable business "continued to deliver double-digit growth."
GE said orders remained stable at $171 billion, even though infrastructure orders fell 10%.
Copyright Agence France-Presse, 2009