General Electric Tumbles As 1st-Quarter Profit Disappoints and Company Cuts 2008 Forecast

NEW YORK (AP) -- General Electric shares are tumbling after the conglomerate said financial market woes caused it to widely miss Wall Street expectations for the first quarter and drove it to lower its full-year profit forecast.

The Fairfield, Conn., company's shares dropped $4.32, or 11.8 percent, to $32.43 in heavy morning trading.

Goldman Sachs analyst Deane Dray took the stock off the bank's Americas Buy List, a portfolio of recommended securities, and downgraded shares to "Neutral" from "Buy."

GE's financial businesses did poorly, Dray said, with profits at the commercial financial business falling 20 percent. While the infrastructure business did well, major equipment orders increased just 11 percent versus Dray's expectations for 20 percent growth.

Nicole Parent of Credit Suisse also downgraded the stock to "Neutral" from "Outperform," or "Buy." All of GE's businesses reported weaker profit growth than she expected. She noted that profit in the health care, industrial, GE Money and commercial financial units all fell, with health care profits down 17 percent.

Citi analyst Jeffrey Sprague described the results as "the biggest, most overt miss we can recall in 16-plus years of coverage."