No matter what you might think, I'm really not happy about this, since I'm a GE stock-holder. It seems that GE posted rather weak earnings, and its stock price plunged 12.8% today, dragging the Dow itself down 256 points. From the Wall Street Journal:
WAH! $47 BILLION! Up in smoke, just like that. Ah, what I could have done with $47 Billion. Or $47 million, for that matter. C'mon, guys, let's pick up the pieces and get back to work. GE has a larger GNP than many small countries, so I'm sure they will survive this painful episode. Let it be known that I'm at GE's beck and call should they need whatever help and advice I can muster. AuntMinnie.com reports that GE Healthcare didn't do so well, either:
The conglomerate has significant presence overseas and was thought to be somewhat resilient to a slowdown in the U.S. economy, but it posted earnings well below analysts' expectations, a near unheard-of outcome for a company renowned for posting profits at or above Wall Street forecasts. GE also cut its 2008 earnings outlook.
The decline in GE shares was the worst in percentage terms since the 1987 market crash. The drop erased about $47 billion in market capitalization.
Mike Thompson, research director at Thomson Financial, which tracks earnings data, called GE's report "startling," underscoring both the seriousness of the economy's problems and the extent to which analysts' profit expectations remain far too rosy.
$500 million profit doesn't sound so bad to me, but everything is relative, I guess.
A lackluster U.S. economy and continued regulatory shipping restrictions on its surgical supplies business adversely affected revenues and profits at GE Healthcare in the first quarter of 2008. For the period (end-March 31), revenues for the Chalfont St. Giles, U.K.-based vendor dipped slightly to $3.88 billion, compared with $3.89 billion in the first quarter of 2007. Profit decreased to $528 million, compared with $637 million in the same quarter a year ago.
In its first-quarter financial report, parent company General Electric of Stamford, CT, noted that GE Healthcare was "impacted by a difficult U.S. environment" and cited the ongoing suspension of C-arm deliveries from its GE OEC Medical Systems unit as part of a consent decree with the U.S. Food and Drug Administration.
A foundering GE means a foundering U.S. economy, and that is serious trouble for all of us. This is not good. Not at all. And I'm not kidding about that.