The market has been pushing down GE (GE) expectations for weeks. It has taken the stock to a multi-year low and left investors thinking that the big conglomerate would be crippled by its financial unit and slow growth in it infrastructure. Some analysts do not see a recovery until next year.

GE posted numbers that were worse than expected. For the year, revenue was $183 billion, up 6%, and earnings were $18.1 billion, down 19%. For Q4 net income dropped 46% to $3.65 billion,  $.35 a share, from $6.97 billion, or $.66 a share in the same quarter last year. The quarterly numbers included $1.5 billion of after-tax restructuring and other charges

GE insists that it capital position will make it nearly certain that the company can keep its "AAA" rating. If its results worsen that still may not be true.

GE’s real trouble is that too many of its divisions fell apart at the same time last quarter. It largest division, Technology Infrastructure, grew only 1% in both revenue and operating income. It Capital & Finance and Commercial & Industrial units each lost 17% of their revenue compared to the same quarter last year,

Capital Finance operating earnings dropped 67%.

GE said 2009 would be "extremely difficult". Based on its Q4 results, that may be an understatement. It will keep its dividend, which some fears it would cut, but that is cold comfort.

Douglas A. McIntyre

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