GE profit falls steeply

on July 17 2009 7:16 AM

General Electric Co said profit fell by almost half, on a deeper drop in revenue than Wall Street expected, as the slump that has gripped its finance and media businesses took hold of its heavy industrial units.

The largest U.S. conglomerate said on Friday second quarter net income came to $2.67 billion, or 24 cents per share, compared with profit of $5.07 billion, or 51 cents per share, a year earlier. Profit from continuing operations came to 26 cents per share.

Revenue fell 17 percent, more than the 10 percent slump analysts had forecast. Factoring out fluctuations in exchange rates, revenue would have been down 12 percent.

The world's largest maker of electricity-producing turbines and jet engines has been dragged down by deteriorating profit at its GE Capital arm, which has been hurt by heavy investments in commercial real estate and a weaker credit environment.

Shares rose 10 cents to $12.50 in premarket trading.

GE shares have fallen about 24 percent so far this year, a much sharper decline than the 1 percent slide of the Dow Jones industrial average <.DJI>.

(Reporting by Scott Malone; Editing by Derek Caney)

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