GE Loses Credibility!

The blue chip GE is down 11% this morning after missing estimates. A Goldman analyst says that GE has now lost credibility! Shame on Mr. Immelt for reaffirming guidance as late as March 13th. Either he was lying or things really did turn for the worse at the end of the quarter. He is on record as saying after the Bear Stearns collapse, that certain asset sales were disrupted. The suspect unit was the finance unit of GE despite most of the CEO's reassurances over the last few months. I'm glad we were patient on this one.

In some respects I've almost wanted GE to stumble over its financing division, so as to buy in cheaper. I was starting to believe that they would pull through this credit crunch unscathed, and an opportunity was missed! I still think their infrastructure and energy related investments will do well. In fact their, if it wasn't for their overseas sales, their results would have been worse. Immelt has in the past suggested that if their GE Money division wasn't performing up to standards, that they would sell it. I noticed a few weeks back that they sold their UK Money arm.

Now that they're in the penalty box, I think we can wait some more to see if it gets cheaper. GE is thought to be a bit of a bell weather on the economy, and as earnings season kicks off I'm expecting more surprises.