General Electric (GE) Sinks 11% on Shocking Disappointment

Shares of General Electric (NYSE: GE) are 11% lower in pre-open trading following a Q1 shortfall and lower guidance. GE said demand for global Infrastructure business remained strong, but financial services businesses were challenged by a slowing U.S. economy and difficult capital markets

General Electric reported Q1 earnings of $0.44 per share, which was below the consensus of $0.51. Revenues came in at $42.24 billion, versus the consensus of $43.68 billion.

GE sees Q2 EPS of $0.53-$0.55, below the consensus of $0.58. For FY08, GE sees EPS of $2.20-$2.30 below the consensus of $2.43 consensus.

Commenting on weakness in their financial services business, GE said the extraordinary disruption in the capital markets in March affected their ability to complete asset sales and resulted in higher mark-to-market losses and impairments. GE said this impacted earnings by $.05 per share versus plan.

On its call, GE said finance outlook worsened after Bear Stearns collapse. The firm also said it saw a significant slowdown in US healthcare in March. CEO Jeff Immelt said the company saw a slowing US economy in Q1. CFO Sherin said appliances had a tough market. [LJ]

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