GE lowers 2008 earnings forecast by $2B

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GE has revised its earnings guidance for the third quarter, reflecting weakness and volatility in the financial services markets.

The company said that it now expects that its financial services businesses will earn approximately $2 billion in the third quarter, which, while impacted by current market conditions, is expected to exceed the earnings of any financial services company. Industrial earnings are expected to continue to be strong in the quarter, led by strong performances in the infrastructure and media businesses and are expected to increase approximately 10 to 15 percent, excluding consumer and industrial.

Since the difficult conditions in the financial services markets are not likely to improve in the near future, and GE said it is revising its earnings guidance for the full year to $19.5 billion to $21 billion, from $22 billion to $23 billion.

 “Given the recent dramatic developments in the financial markets, we have made some tough decisions to further reduce risk and strengthen our balance sheet while maintaining our dividend commitment. We have suspended the stock buyback to reduce GE Capital leverage, while still being able to pursue opportunistic acquisitions,” said GE Chairman and CEO Jeff Immelt.