General Electric Co's fourth-quarter revenue fell short of Wall Street expectations, with Europe's weakening economy and weak sales of appliances the main culprits.

But the largest conglomerate held to its forecast of double-digit profit growth this year, saying that it would expand in rapidly growing economies and cut costs in Europe, particularly at its health care arm.

Revenue fell 7.9 percent to $37.97 billion, down from $41.23 billion and below the $40.03 billion analysts had expected. Factoring out the effects of last year's sale of a majority stake in NBC Universal revenue would have been up 4 percent.

In addition to general European weakness, sales of appliances were off, with the home and business solutions division that sells them recording a 4 percent revenue drop.

Sales at GE's energy division, which makes products ranging from electric turbines to equipment used in oil production, were up 19 percent in the quarter, slightly below the company's expectations as some deliveries were shifted out of the fourth quarter into 2012, executives said.

There are a few challenged markets, like Europe and appliances, but on balance we have a positive outlook, Immelt told investors on a conference call, where he also reiterated the Fairfield, Connecticut-based company's forecast for double-digit earnings growth this year.

The revenue miss concerned investors, overshadowing a penny-per-share earnings beat and sending GE shares down 0.1 percent to $19.13 on the New York Stock Exchange.

This miss is the latest blow for Immelt, who has seen GE shares generally lag the U.S. stock market during his decade as CEO. In the fall of 2007, GE shares briefly topped $40.50, where the stock had closed before Immelt's storied predecessor Jack Welch handed off the reins. Today the shares trade at less than half that price.

Over the past year, GE shares are up 4.5 percent, lagging the 6.8 percent rise of the Dow Jones industrial average <.DJI> but ahead of the 2.5 percent rise of the broader Standard & Poor's 500 index <.SPX>.

We're concerned about the revenue miss, said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York. That's really what we're focused on this earnings season. We're not so concerned about being a penny above or below expectations, because that can be handled with accounting.

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For a graphic on GE: http://link.reuters.com/kun26s

For a graphic on industrial-sector earnings:

http://r.reuters.com/van26s

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MARGINS IMPROVE

The world's biggest maker of jet engines and electric turbines said net income from continuing operations rose 0.6 percent to $3.93 billion, or 37 cents per share, compared with $3.90 billion, or 36 cents per share, a year ago.

Factoring out one-time items, profit came to 39 cents per share, above the 38 cents analysts had forecast, according to Thomson Reuters I/B/E/S.

Profit margins at the company's industrial operations were better than expected, analysts noted, with the energy and aviation units showing improvement.

We anticipated total industrial margin to be weaker overall, wrote BernsteinResearch analyst Steven Winoker, in a note to clients.

Immelt also noted the prices its energy arm is able to charge for its equipment, particularly wind turbines, are stabilizing, which should boost profit margins.

We see energy pricing stabilizing as we move through 2012 and into 2013, Immelt said.

LESS DEPENDENT ON EUROPE

GE is less dependent on Europe than rivals Siemens AG and Philips Electronics NV

, which earlier this month warned that the Eurozone debt crisis would hurt their results this year.

GE noted that its industrial revenue in emerging markets was up 25 percent in the quarter, with strong growth in Brazil, Russia, China and India.

GE kicked off a wave of earnings reports from big U.S. manufacturers, with blue-chip peers United Technologies Corp , Caterpillar Inc and 3M Co all due to follow suit over the next week.

In December, GE indicated that it was managing Europe well. Now that's what is pointed to for the light revenue. I think that's kind of a weak excuse, said Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

(Reporting By Scott Malone in Boston, additional reporting by Ryan Vlastelica, Chuck Mikolajczak and Nick Zieminski in New York; Editing by Tim Dobbyn, Derek Caney, Phil Berlowitz)