Profits fall at General Electric

Check GE's share price

US conglomerate General Electric (GE) has announced a surprise fall in first quarter income with big profit falls in its finance and industrial divisions.

GE said group profit would be 6% lower at $4.3bn (£2.2bn), with profits at GE Money down 19% and the industrial division down 16%.

The news sent shares in the US's second largest quoted company down 11% in early trading in New York.

With its wide range of products, GE is seen as an economic barometer.

'Disappointment'

In addition to offering commercial and consumer financial products, GE produces jet engines, water treatment plants, medical equipment and controls media company NBC Universal.

The disappointing performance of the industrial division, which makes lighting products and electrical appliances, is seen as an indication that problems in the financial markets are spilling over into the wider economy.

"These results confirm that the slowdown is widespread and beginning to impact capital expenditures and longer-cycle businesses," said Stephen Surpless, an analyst at Cantor Fitzgerald in London.

General Electric said the company was performing better outside of its home market in the US.

"Our financial services businesses were challenged by a slowing US economy and difficult capital markets," said GE chairman and chief executive Jeff Immelt.

"While we are disappointed with our results, the fundamentals of our businesses are strong," he said in a statement.