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GE reports sharp drop in profit GE reports sharp drop in profit
(about 4 hours later)
US conglomerate General Electric has reported a 44% drop in quarterly profit and warned that it expectS 2009 to be "extremely difficult". US conglomerate General Electric has reported a 44% drop in quarterly profit and warned that it expects 2009 to be "extremely difficult".
Its net profit fell to $3.72bn (£2.73bn) in the last three months of 2008, as earnings at GE Capital plummeted 67% from a year earlier.Its net profit fell to $3.72bn (£2.73bn) in the last three months of 2008, as earnings at GE Capital plummeted 67% from a year earlier.
"We're planning for a really tough environment," GE chief executive Jeff Immelt told analysts."We're planning for a really tough environment," GE chief executive Jeff Immelt told analysts.
Shares in GE fell 6.7%, even though the results met lowered expectations.Shares in GE fell 6.7%, even though the results met lowered expectations.
"The recession is tough, the financial services crisis is worse," said Mr Immelt."The recession is tough, the financial services crisis is worse," said Mr Immelt.
'Difficult year''Difficult year'
GE's energy infrastructure division, which produces electric turbines and windmills, was the bright spot, as its profit had grown by 11%. On the basis of where the global economy has been, their earnings for the year were amazing Neil Parker, Royal Bank of ScotlandGE's energy infrastructure division, which produces electric turbines and windmills, was the bright spot, as its profit had grown by 11%. On the basis of where the global economy has been, their earnings for the year were amazing Neil Parker, Royal Bank of Scotland
Mr Immelt confirmed GE would pay its annual dividend.Mr Immelt confirmed GE would pay its annual dividend.
"We're not straining in order to pay it. We've got a lot of cash," he said."We're not straining in order to pay it. We've got a lot of cash," he said.
For the whole of 2008, GE's net profit fell 22% to $17.41bn, and the company said it had been the third-best year in its history.For the whole of 2008, GE's net profit fell 22% to $17.41bn, and the company said it had been the third-best year in its history.
Paul Mendelsohn, chief investment strategist at Windham Financial Services said: "Even though they met expectations, the break down of individual segments is a concern."Paul Mendelsohn, chief investment strategist at Windham Financial Services said: "Even though they met expectations, the break down of individual segments is a concern."
"What Immelt is indicating basically reflects that, in saying 'we expect a very, very difficult year'.""What Immelt is indicating basically reflects that, in saying 'we expect a very, very difficult year'."
Neil Parker, strategist at Royal Bank of Scotland, said: "On the basis of where the global economy has been, their earnings for the year were amazing."Neil Parker, strategist at Royal Bank of Scotland, said: "On the basis of where the global economy has been, their earnings for the year were amazing."