U.S. and European markets were rattled Friday by an unexpected announcement that General Electric’s profits for the first quarter fell 6%. The company’s NBC Universal media business reported a 3 percent increase in both sales and operating profit.
GE posted a profit of $4.3 billion, or 43 cents per diluted share, compared with $4.57 billion, or 44 cents a year earlier. Revenue rose 7.8% to $42.24 billion.
NBC Universal was a bright spot, reporting its sixth consecutive quarterly rise in profits. Cable networks USA, Bravo and Sci Fi contributed to operating profit of $712 million. The company called the performance of the NBC broadcast network “solid.” Those businesses helped offset a “challenging” environment for the company’s local stations, GE said. NBCU’s sales for the quarter ended March 1 rose to $3.58 billion.
Network and local station revenue was basically flat in the quarter, but operating profit rose 3 percent, a company executive said on the conference call. Local ad spending fell about 11 percent in the quarter, a symptom of the soft economy, the company said.
NBCU’s cable channels delivered double-digit profit growth and MSNBC and CNBC’s Business Day had their best rated quarter in six and seven years, respectively, the company said.
The company’s revenue from digital media businesses including the Hulu video site rose 5 percent, the executives said.
GE’s corporate earnings were dragged down largely by it GE Capital financial unit, underscoring the breadth of the credit crisis and making more real the specter of a recession.
GE Chairman Jeffrey Immelt said during the first quarter, shortly after GE executives had assured analysts the company would meet its projections, Bear Stearns nearly collapsed, catching the financial and political world by surprise.
“We hate disappointing investors. It’s not part of the company. It’s not part of the culture. We take accountability for that,” Mr. Immelt said on NBCU-owned CNBC Friday.
In it statement, GE cut its 2008 outlook, projecting little changed to up 5%.
“This is something that we clearly didn’t see until the end of the quarter,” Immelt said on the conference call. “What we did is try to reflect on that, not make excuses and take appropriate actions. The company’s fundamentals remain strong. We believe that the strategy and the fundamentals remain strong.”
(Editor: Baumann)
NBCU a Bright Spot for GE in Bummer Quarter
Apr 11, 2008 • Post A Comment
A day or two after Bears Sterns collapsed, GE chieftan Immelt came on CNBC and said everything with GE was OK.
In essence he was giving pre-guidance, on his own airwaves, CNBC. He also bought back a lot of the company’s stock. That looks good to investors: the leader has faith in the company
But was it? Last Friday GE, the third largest company in the world, took down the entire stock market, in announcing its quarterly report. It cited unanticipated lending problems with its GE Capital Finance unit.
Investors are wondering if he did know, in advance, and why he didn’t reveal that in his mid March appearance on CNBC.
On Friday, after the train wreck, after hours trades were up.
Not surprising. Could be bottom fishers. Or was it GE insiders trading to capitalize on a 12 percent drop?
Gotta wonder. I only ask because you should read the questions investors are now asking.
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