Losses at finance unit slice GE earnings; stock tumbles
General Electric Co. stock fell the most since July after third-quarter profit declined 45 percent and lower real estate and consumer lending caused sales to drop more than analysts predicted.
GE fell 71 cents, or 4.2 percent, to $16.08 in New York Stock Exchange trading. The shares earlier declined 5.6 percent, the most on an intraday basis since July 17.
Chief executive Jeffrey Immelt is shrinking the finance unit and considering a reduced stake in NBC Universal as he builds energy, transportation, and health care businesses. The GE Capital plan is ahead of schedule and cut into sales, he said in an interview yesterday. Higher consumer finance losses and fewer real estate transactions hurt GE Capital.
“We expected GECS to report a pretax loss of about $275 million,’’ Citigroup Inc.’s Jeffrey Sprague, ranked the top multiple-industry analyst by Institutional Investor in 2009, wrote in a note to clients. “Instead the loss was $997 million’’ before a $1.14 billion tax credit.
Revenue fell 20 percent to $37.8 billion, trailing the $39.7 billion average estimate in a Bloomberg survey, the Fairfield, Conn., company said in a statement.
Profit from continuing operations declined to $2.45 billion, or 22 cents a share.
