General Electric Co.'s dismal first-quarter results and lowered 2008 outlook contradicts the confidence its CEO expressed in last months shareholder meeting, leaving analysts speculating and investors jolted on the future of the conglomerate.

Shares of the second-largest U.S. company by market capitalization fell 5.4 percent on the news, dragging down the broader markets in the U.S. and abroad.

Deane Dray, an analyst at Goldman Sachs, said in a note to investors Friday that the earnings miss and lowered guidance raises credibility concerns for GE over the near-term, given that CEO Jeff Immelt had expressed confidence and reaffirmed guidance and operating targets on his March 13 retail webcast. This implies that the back half of March deteriorated significantly, which is especially unnerving.

Goldman downgraded GE shares from its Americas Buy list to neutral based on Friday's news.

GE said its profit fell 6 percent to $4.3 billion, or 43 cents per share, from $4.57 billion, or 44 cents per share, a year ago. Earnings from continuing operations totaled $4.4 billion, or 44 cents per share, down 8 percent year-over-year. Revenue rose 7.8 percent.

GE stock should clearly be under pressure, this is the biggest, most overt miss we can recall in 16+ years of coverage, said Jeffrey Sprague, analyst from Citigroup.

The Fairfield, Conn.-based conglomerate's said sales were up 8 percent, to $42.2 billion, from $39.2 billion. Global sales grew by 22 percent.

Analysts surveyed by Thomson Financial had expected continuing operations profits of 51 cents per share, on sales of $43.68 billion.

We hate disappointing investors,'' Immelt said. It's not part of the company. It's not part of the culture. We take accountability for that.''

Nevertheless, we failed to meet our expectations, he added.

The Dow Jones Industrial Average, of which GE is one of the largest constituents, traded as low as 177 points at one stage. The impact was felt in European markets with the FTSE100, which had been a relatively positive morning, turning red, trading down more than 60 points.

While we knew [GE Capital Services] was going to be sloppy, with the gains announced and the usually volatile tax rate, it was particularly bad, and this was the majority of the miss, said analyst C. Stephen Tusa, J.P. Morgan Chase & Co. Tusa noted that healthcare and Industrial headwinds were also greater than expected, and NBCU missed.

GE is now forecasting full-year earnings per share to be in the $2.20-2.30 range, when analysts had been forecasting a median $2.43 a share.