The short-term drop in share price for General Electric (NYSE:GE) really isn't that important, as anyone investing in the company should be looking at long-term performance and value.
At the same time, the quarterly drop in profits to $4.36 billion, or 44 cents a share wasn't a good sign for the overall, worldwide economy. It's the worst performance by GE since the 1987 market crash in October 1987; almost 20 years ago.
It was also the first time GE missed analysts' expectations in 37 quarters. In contrast to the 44 cents a share performance, analysts had looked for a much higher 51 cents a share, which caught everybody off guard, and raised questions about the ability of GE leadership to properly measure the performance of the company.
It didn't take long for the renewed pressure of selling off NBC Universal to return, as it underperformed the expectation of increasing profits between 5 to 10 percent; it was only able to garner a three percent increase.
I don't see this happening until after the Olympics, as mentioned at bizofshowbiz. They just aren't going to pass up the windfall advertising revenue associated with it. The pressure to sell NBC Universal will continue on until it happens, as there is no short-term remedy available to the company, and even if the economy was flying on all cylinders, it would be underperforming other media firms.
In relationship to why GE is so important in its performance, is it's one of the truly global bellwhethers that is a real measure of the worldwide economic conditions. They are embedded in a wide variety of industries and countries, which makes them one of the few companies that reflect what is happening overall in the world.
The quarterly results reflect what most of us know, that economic problems have extended far beyond U.S. borders, and now challenge most countries in the world.
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