GE reports big drop in quarterly profits

Alisa Roth Jan 23, 2009
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GE reports big drop in quarterly profits

Alisa Roth Jan 23, 2009
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Scott Jagow: A little more on GE. Its been around for 117 years, and 2008 was one of the worst. A lot of people own GE stock, so they probably wanna know, is this just recession or is there something else wrong? Alisa Roth looked into it.


Alisa Roth: General Electric’s stock is worth 62 percent less than it was a year ago.
In December, GE said it wouldn’t forecast quarterly results anymore. And it’s not making any predictions about next year, either.

Richard Sparks is an equities analyst with Schaeffer’s Investment Research. He says part of GE’s problem is its image. It’s long been thought of as an industrial stock.

Richard Sparks: What we’re seeing now, though, over recent years is that General Electric has kind of transformed itself, and a large part of its business now is actually in the financial area.

Which of course means it’s been hit along with the rest of the financial companies. Sparks says one lousy earnings report shouldn’t matter too much, since most companies are doing badly right now.

Sparks: Expectations across the board for this quarters’ earnings are very subdued.

Still, there’s talk that GE’s poor performance of late could force it to lose its triple-A credit rating. And Sparks says that could put a real mark on its reputation.

In New York, I’m Alisa Roth for Marketplace.

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