General Electric Co, the largest US conglomerate, today reported a 36 per cent drop in its net income for the first quarter of the current year, pulled down by falling earnings at its finance arm and the NBC Universal media unit, which was partially offset by the strength of its energy equipment business.
Hurt by about $500 million in order cancellations at its infrastructure units that make products ranging from electric turbines to train engines, GE also warned that there are some signs the economy may be continuing to deteriorate.
"The economy remains tough," chief executive Jeff Immelt said during a conference call. "There are places where we can still win and we are positioning the company to excel as we come out of this in 2010, 2011 or whenever that takes place."
The Fairfield, Connecticut-based company plans to cut its costs by more than $5 billion this year.
GE's net income on common stock fell 36 per cent to $2.74 billion, or 26 cents per diluted share, down from $4.3 billion, or 43 cents per diluted share a year earlier.
Revenue fell 9 per cent to $38.41 billion even as order backlog remained stable at $171 billion.
Profit at GE Capital fell 58 per cent to $1.12 billion. Profit at the NBC Universal media business fell 45 per cent to $391 million as revenue fell 2 per cent.
GE's Energy Infrastructure unit, which makes products ranging from gas-fired turbines to solar panels, reported a 19 per cent rise in profit to $1.27 billion.
During the first quarter, GE cut its quarterly dividend by 68 per cent and was stripped of its top-tier "AAA" credit rating by both Moody's Investors Service and Standard & Poor's.
GE has raised 93 per cent of the money it plans to seek from long-term debt markets this year, and will start on its 2010 targets early once it has met its 2009 needs, executives said.
GE shares were down 4 cents to $12.23 on the New York Stock Exchange. GE shares are now trading at about double their 52-week low of $5.86 hit on 4 March.