GE Aviation, a unit of General Electric Co. (NYSE: GE), warned that it expects orders to be cut in half this year amid the ongoing recession. Jack Lutze, the unit's vice president of sales for Europe and Africa, told Reuters that deferrals are rising as airlines postpone spending on new jets. "Everybody is looking to push back 2010," explained the VP.

On the plus side, Lutze reports that GE Aviation has an order backlog that should translate to years' worth of production -- leftovers from a period of expansion earlier this decade in the airline industry. "This industry lurches from boom to bust," he observed. "We lag the industry on the way down and on the way up."

General Electric Company (NYSE: GE) missed by a penny. But a look behind its corporate veil reveals a company that is not getting the so-called benefits of diversification. Instead, the great performance of one of its businesses is being overwhelmed by all the other businesses which are shrinking. My concern is what happens if that one business also takes a dive.

GE net income fell 44% to $3.65 billion and its earnings per share (EPS) from continuing operations was 36 cents -- analysts had expected 37. Here's the bad news:

• GE's financial-services business, GE Capital, made a profit of $383 million -- an 88% drop while its revenues fell 18%. Its CNBC cable channel reported that it would cut 7,000 jobs and save $2 billion.
  
• GE's consumer and industrial business suffered an 86% earnings decline as revenue fell 17%
• GE's television and movie network. NBC Universal suffered a 6.3% earnings decline while revenue slid 2.7% as declines at local stations -- presumably suffering from weak advertising demand -- were partially offset by strong cable earnings

After posting a disastrous first quarter. General Electric Company (NYSE: GE) Chief Executive Jeffrey Immelt is resisting calls from Wall Street to break up the conglomerate.

"There are more reviews and intensity, but no real change to the strategy,'' Immelt said told Bloomberg News. ``The strategy remains intact.''

Really? Shares of the Fairfield, Conn.-based company have slumped about 13% this year. The stock had its biggest fall in 20 years after reporting disappointing results. Immelt, though, either is oblivious or cool under fire. I am not sure which.

It is not enough that GE (NYSE:GE) missed its earnings and that Wall Street is challenging the company's structure.The firm's aircraft engine operation has run into troubles of its own.

According to The Wall Street Journal, "In another embarrassing maintenance blunder involving the aviation industry, General Electric Co. disclosed it is working with carriers and U.S. regulators to resolve questions about improperly certified parts in dozens of its jet engines."

The issue is by no means small. It involves almost two-dozen engine types and hundreds of parts. GE inspectors may have failed to catch the installation of uncertifed pieces of equipment.

GE needed to stay out of the headlines. The company was aggressively attacked after a poor first quarter earnings report. Analysts are questioning whether such a widely diversified firm can operate effectively. While the GE engine troubles are not related directly to that issue, it continues a string of bad news.

And, the press loves a negative story.

Douglas A. McIntyre is an editor at 247wallst.com.

General Electric (NYSE: GE) not only disappointed Wall Street investors this past Friday with its horrible results, but shocked investors as CEO Jeffrey Immelt gave the "all is alright" signal in mid-March. He should resign as he has had nearly 7 years to grow this once great company.

GE should also bite the bullet and spin off several segments into separately traded companies. I wrote about this extensively last year for AOL, but now the rationale is abundantly clear. This company--a major conglomerate--cannot deliver decent shareholder returns. Immelt took the reigns of GE on September 7,2001 when the stock was at $40. Nearly 7 years later the shares are at $32 and barely holding on. I find it amusing that some "value" investors think GE is interesting at this level. These were the same investors that found GE interesting and a value-play at $38 last year.

The problem with GE is not that it's too big: the problem is it is too complex. The largest industrial company in the world now is Exxon Mobil (NYSE: XOM) with expected revenues this year of $550 billion. This company however is strictly in the energy sector--it's measurable and quantifiable. GE is a mish-mash of businesses, from light bulbs to jet engines to appliances to consumer loans, whereby some segments are doing well and others horribly. How does any analyst assign a proper PE ratio expectation?

One segment, the infrastructure division grew its revenues by an admirable 23% this past March quarter and its profits by 17%. With this kind of growth and visibility into the next 18-24 months on revenues because of contractual commitments, this division alone could command a 25 + PE ratio. GE as a whole is now trading at 14 X 2008 EPS estimates of $2.20-2.30.

The GE Financial segment was woeful and provided the negative surprise. This segment on its own would trade at a PE ratio of between 9-11 times. The NBC-Universal division showed only 3% year-over-year growth, but cash flowed very well. This segment should command a 15-17 PE multiple.

I estimate that General Electric Company (NYSE: GE)'s Infrastructure segment is worth $153.7 billion, roughly the same as last July's $154.6 billion.

GE's Infrastructure segment produces, sells, finances and services equipment for the air transportation and energy generation industries. It also produces, sells, and services equipment for the rail transportation and water treatment industries.

GE Infrastructure is GE's crown jewel at the moment. Its revenues rose 23%, or $11.0 billion, in 2007 on higher volume ($7.9 billion), higher prices ($1.1 billion) and the effects of the weaker U.S. dollar ($0.8 billion) at the industrial businesses in the segment. The increase in volume reflected the effects of acquisitions at Aviation and Oil & Gas and increased sales of commercial engines and services at Aviation, thermal and wind equipment at Energy, and equipment and services at Oil & Gas and Transportation.

GE closed the day down at $32.52, down 36 cents, just over a 1% drop, the slide starting in the morning and continuing throughout the day as lots of other corporations continued with announcing their earnings reports throughout the financial world.

GE is investing in its water treatment customers, moving together with its financial arm to provide financing options that allows distributors of its water processing technologies to access credit. And in another score for its aviation department, GE's venture with French CFM international had orders announced for some $850 million worth of jet engines.

GE ended the day up at $32.46, a second day of positive movement with a very strong 15 or so cent leap at the end of the day, a spike no doubt due to the announcement of a 20 year, $1 billion contract to service Cathay Pacific jet engines.

This is a very nice plum for GE Aviation. As CEO Jeff Immelt noted in the earnings report, while GE makes a profit on the building and selling of engines of all sorts, it is the service contracts that often will contribute in a solid way to the bottom line at any given division of the conglomerate's industrial divisions. GE Aviation will be taking care of all Cathay Pacific's Boeing 777 aircraft with the GE-90 engines on them.

GE finished today at $34.21, up 48 cents. Despite the rough public news about the jet engine that exploded GE reports GE fought the general market slide quite nicely. And GE's aviation division still have an $80 million engine order deal going with Nippon Cargo Air.

With the Dow undergoing a 6% slide since early May, John Reese makes the case that GE is a strong stock to look into right now, leaving Dow's large cap stocks like GE good picks at a time like this.