General Electric Co is on track to report its eighth straight quarter of profit declines on Friday, with investors looking for evidence the largest U.S. conglomerate is stabilizing its hefty finance unit.

Chief Executive Jeff Immelt last month told Wall Street that the world's biggest maker of jet engines and electric turbines expects flat earnings in 2010, as it sells its NBC Universal media business and continues to whittle back GE Capital.

What I'm looking for is just some stability out of the bank, said Daniel Holland, equity analyst at Morningstar, referring to GE Capital. I'm looking to see pre-tax, pre-provisioning income having some type of bottom there.

GE Capital, which has operations ranging from lending money to mid-sized businesses to investing in commercial real estate, was hard hit by the credit crunch and global downturn. Concerns about the businesses' heading pounded GE's stock to 18-year lows last March.

Shares of GE have rebounded sharply since then and were trading at around $16.60, up 6 cents, on Wednesday. That is up 18 percent over the past 52 weeks, lagging the 28 percent rise of the Dow Jones industrial average <.DJI>.

The company has been cutting back its financial operations, including pulling back from underwriting home mortgages in the United Kingdom and pruning its investments in commercial real estate. GE Capital slashed its costs by about 25 percent last year and aims for another 5 percent trim this year.

We're still going to be watching the financial side of the equation, GE Capital, seeing how effective they are at reducing their exposure to that part of the business, said Jim Rudd, principal and chief executive of Ferguson Wellman, a Portland, Oregon-based company that oversees about $2.5 billion in assets.

That's just a part of the revamp of GE's portfolio, which is also in the process of selling a majority stake in its NBC Universal media business to No. 1 U.S. cable operator Comcast Corp .


GE no longer provides per-share profit forecasts, instead offering Wall Street an annual framework of how it expects its various operations to perform.

Analysts, on average, look for GE to report fourth-quarter profit of 26 cents per share, excluding one-time items, according to Thomson Reuters I/B/E/S. On a net basis, that would represent a 27 percent decline.

Some of the more accurate analysts, as measured by Thomson Reuters StarMine, are expecting profit to come in 2.6 percent below consensus.

While the finance arm has captured much of Wall Street's attention over the past year, GE's hefty industrial units -- which also make railroad locomotives and equipment used in drilling for natural gas and oil, represent the bulk of its sales and profit. Those operations, which can book orders a year or more ahead of delivery, have been more stable for the company during the worst economic downturn since the Great Depression of the 1930s.

But the long lead times that protected the industrial businesses during the recession may also mean it will take longer for those units to feel the effects of any pick-up in economic activity, analysts noted.

Many of these verticals are likely to continue reporting declines in (original equipment) deliveries through 2010 and may not show real recovery, excluding lower restructuring expenses, until 2012, wrote Deutsche Bank analyst Nigel Coe, in a note to clients.

As-expected results could turn the attention of some on Wall Street to the question of where the company starts spending its money. GE officials have said the company expects to be sitting on about $25 billion in cash by the end of 2010.

That's a lot of money, said Morningstar's Holland, who added he will be interested in just seeing how they're thinking about allocating that capital.

GE Chief Financial Officer Keith Sherin in December said that buying back the $3 billion preferred shares the company sold to Warren Buffett's Berkshire Hathaway Inc would be a priority for the company. The earliest that it can do so is in October 2011.

(Reporting by Scott Malone, editing by Dave Zimmerman)