Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Businessweek Archives

GE's confusing signal on earnings season

More than a month ago, things were looking grim.

I wrote in early April about General Electric’s (GE) shockingly weak earnings report. Along with bad first quarter news from Wachovia (WB) and other firms, GE’s report suggested the U.S. economy was in far worse trouble than many expected. If GE, one of the world’s best-run companies, could be hit so hard, then economic troubles could decimate corporate earnings and send a depressed stock market even lower.

Looking back, these worries were both right and wrong. First quarter earnings were weak. With only 6% of the S&P 500 still yet to report, Thomson Reuters expects first quarter earnings to fall 17.5%, 2.3 percentage points worse than expected.

But there’s also an emerging consensus that GE’s troubles were unique. GE, which this week announced plans to spin off its appliance division, is facing lots of questions from investors. They mostly blame management, not the economy, for April’s surprise.

Plenty of other big firms reported solid results despite the weak economy. If the financial sector (the biggest loser) and the energy sector (the biggest winner) are taken out of first quarter earnings estimates, profits actually rise 2.9%.

Fellow Investing Insights blogger Howard Silverblatt has far more about earnings and expectations for the rest of the year in the post below.

Gary Gordon analyzes earnings season here, while Mike Burnick offers his two cents here.

Since early April, stocks have moved higher on rising hopes that the economy can revive later this year. Who would have thought that, amid one of the most disappointing earnings seasons in recent memory, the optimists would return to Wall Street?

blog comments powered by Disqus