Turmoil in financial markets: GE cuts earning forecasts

General Electric (GE) has decreased its earning forecasts considering recent unrest in the financial markets.  Now the 3rdQ profits are expected 43-48 cents per share while they were 50-54 per share in a previous forecast.

The company also decreases its earning forecast for the full-year to $19.5bn-$21bn that were $22bn-$23bn in the earlier prediction.

According to the company, many other steps are also being taken to boost its fund and it also includes suspension of its funds.

It has also been stated that the company may leave its dividend at $1.24 per share till the end of next year. It is happening first time that the company has not raised the payout since 1970.

GE is widely accepted as a leader of the US economy and this gloomy forecast is enough the seriousness of US financial crisis. The company predicts, “In the financial-services markets of US, the difficult conditions do not seem to improve in the near future”.

This news incited analysts to warn investors for preparation regarding further bad news in the coming weeks.

Fortis Bank senior equity strategist Philippe Gijsels said in this connection, “It is quite clear that economy is slowing down and it is normal to see that GE that is heavily engaged in the economy as a whole has warned on it outlook.”

He added, “I fear that same things may happen in the other companies in near future.”