General Electric(NYSE:GE)is blaming its huge Q1 miss on the financial markets, and Bear Stearns NYSE:BSC) specifically.
Two weeks before the end of the quarter, GE CEO Immelt did a webcast in which he said the quarter was great. Implication? Load up on the stock. And now everyone who did is hosed.
What happened? Jeff Immelt wants us to blame those nasty market conditions, the ones that were apparently unforeseeable two days before they occurred. Please. Jeff and GE shouldn't compound this disaster by further damaging their already clobbered credibility. The credit crunch started last summer.
But GE's problem isn't just the credit crunch and Bears' collapse. For example, NBC Universal was also a laggard. It posted revenue growth of 3% and profit growth of 3%; in January, GE had predicted 10% revenue growth and profit increases of 5-10%.
NBC U isn't the most important part of GE's portfolio, so it's understandable that during the earnings call this morning, analysts didn't demand an explanation of what happened with Jeff Zucker's unit. But we sure would love an answer. The best-case scenario for the NBC U division: Zucker and his lieutenants underestimated the effects of the writers strike. Worst-case scenario: It's reflective of a larger decline in the advertising business.
UPDATE FROM CONFERENCE CALL: Pathetic GE: Blame Bear Stearns For Our Mess.
See Also: NBCU: Strike Has "No Noticeable Impact" On Q4
Peter Kafka is managing editor at Silicon Alley Insider.
GE's problem isn't just Bear - NBC underperforming, too
Posted Apr 11th 2008 1:28PM by Peter Kafka
Filed under: Earnings Reports, Bad News, General Electric (GE)
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Reader Comments (Page 1 of 1)
4-11-2008 @ 3:43PM
prousa217 said...
If you think writer strike has hurt GE, wait until you see the truckers strike.. Then we're all dead.. and we can move up the primary election from November to July!!.. We need an "A team" assembled by the world's best and the brightest ( not politicians) like Bill gates, Warren Buffett, CEO of GE, Bloomberg and Becky, Carl and John of the morning CNBC Squawk Box.. oh yeah...
4-11-2008 @ 4:51PM
Athelstan said...
GE is a lumbering mastadon. A Rube Goldberg contraption which dazzles the eyes of the viewer with its movements, but makes no progress in providing shareholder value.
Naming Jeffrey Immelt CEO was a big mistake. He should be asked out. He's had five years to expand that value and he's failed.
4-11-2008 @ 5:02PM
rob said...
Ah growth. People seem to think that growth is a constant. Like productivity increases and cost cutting. How funny! Guys like Welch did well because they were among the first to realize you could just throttle the life out of the supply chain. This does NOT take talent, just ruthlessness. I own an aerospace manufacturing company. If we are throttled anymore we will die. It's quite interesting how our margins are down 50% over the last 8 years, but the pricing to the end user is not. Understand?
4-11-2008 @ 5:14PM
steve said...
Larry Kudlow should run the FED. What we need is not politicos with made up credentials who have never been responsbile for anything perhaps except their car payment but managers who make ethical and moral decisions that benefit (or hurt) everyone equally. These idiots on Wall Street are finally recognized as greater terrorists than Al Quaida
4-12-2008 @ 10:12AM
sheila said...
8 years is enough with GE ! Out with Immelt,Ratigan who R both Jokes !!! Cnbc can-not
talk the fundamenatls of GE which is not fair to investors. Changes R necessary....from a negative may bring a positive.